Paying tax late
 

My wife switched jobs last year and it turns out the 1st job way under taxed her. As a result we owe a few thousand to the IRS. I had anticipated some money owed and thus set some aside, but we can't pay all of it by April 15th, so it's either stick it on the credit card or pay the IRS late. The IRS penalty for paying late is a lot lower than what would be a cash advance on the credit card.

My question is simply: is there any credit impact or other negative impact for paying the IRS late? We would be filing the return on time.

Re: Paying tax late
 

As long as you enrolled in an installment plan, there shouldn't be any negative impact. Only if the IRS places a tax lien can there be a negative effect.

Can Paying Your Taxes Late Affect Your Credit Score? | Credit.com

Re: Paying tax late
 

Tax Topics - Topic 202 Tax Payment Options

You could organize a monthly installment agreement, so long as you set some arrangement up and it doesn't go to court or collections I can't see how it would affect your credit score.

Re: Paying tax late
 

Thanks. It's under 10k owed, and less than that again for what we can pay right now.

Re: Paying tax late
 

I frequent the personalfinance subreddit. http://www.reddit.com/r/personalfinance/

There is an IRS employee who answers questions on this subreddit. He provides answers to questions such as yours. I have pasted his reply below to a similar question about paying taxes late. http://www.reddit.com/r/personalfina..._to_pay_taxes/

"IRS employee here:
For your 2014 federal tax return, file on time or file Form 4868 by 4/15/2015, even if you can't pay in full on 4/15/2015.
Make the largest payment you can comfortably afford on or before 4/15/2015.
Assuming you e-file your 2014 federal return timely, your first balance due notice will be issued in the third week of May. This notice will show any remaining unpaid tax, plus an assessment of Failure To Pay (FTP) penalty, plus interest. If you can full pay by the notice due date, you are done.
If you need a little more time to pay, you can request a short term extension, called a Full Payment agreement. With this plan, you can request up to 120 days to get it paid. During the 120 days, the balance due continues to accrue FTP and interest, but there is no requirement to make a fixed monthly payment, and there is no fee to request the agreement. You could make 1 or 100 payments, as long as it's paid in full by day 120.
If you need more than the 120 days, you can request a formal monthly payment plan, called an Installment Agreement (IA).
There is a one-time set up fee of $120, and a required minimum monthly payment (the balance due on the first notice / 72). You may qualify for the user fee to be reduced to $43. If the balance due on your notice is $11,000, the minimum monthly payment is ~$155.00.
If you know when you file you want the IA, you would include Form 9465 with your electronic or paper return. You can also request a Direct Debit IA through your checking account on the Form 9465. The user fee for a DDIA is $52, or the reduced $43.
After you receive your first notice, you can request either payment plan at irs.gov Online Payment Agreement. You can also make the request over the phone by calling 1-800-829-0922 M - F 7am - 7pm. When you speak with a representative, they will verify your identity, research your account, provide the payment options, and input the resolution you request.
After you request either agreement type, whether online or over the phone, you will receive a confirmation letter with all terms and conditions within 2 to 3 weeks. The Service sends monthly reminder notices when you request a regular IA. No monthly notices are sent on a DDIA.
Payments on a balance due are applied to the tax liability first, then the penalties, then the interest. Assuming you file timely, the FTP rate is reduced to 1/4% of the tax per month for the lifetime of the IA. The interest rate is currently 3% per year. It is compounded daily, and the rate can be increased or decreased on a quarterly basis.
Thank you for reading."