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jastone
Jan 28, 2008, 01:35 PM
I need to know if I can set up a payment plan on taxes owed to the IRS for early withdraw of my 401K. What type of interest will they charge?
AtlantaTaxExpert
Jan 28, 2008, 02:28 PM
Yes, you CAN set up a payment plan.

The IRS will charge about $70 to set it up, then about 8% annual interest until it is paid off.

You can make the payment plan as LONG as necessary, but be sure to KEEP making the payments. If you miss a payment and wait too long to catch up, they shut it down and go after you with the late-payment penalties (which START at 25% and go up from there; NOT a good thing).