A cheaper way to pay off that big tax bill with lower interest

Brennan Haselton, wtop.com

WASHINGTON – Before reaching for a credit card to pay off that big tax bill, there may be another solution with a lot less interest.

Consumer Reports reports the Internal Revenue Service automatically accepts requests for payment installment plans for up to $50,000 in combined taxes, penalties and interest.

But instead of a typical credit card interest rate, the IRS’ first quarter rate for 2012 is just 3 percent and unlikely to change suddenly over time.

Keep in mind you still have to file your 2011 return by April 17 to avoid penalties. There is a fee to enroll in the payment plan between $43 to $105, depending on the arrangement and your income level.

For more information on the IRS payment plan visit the IRS website.

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(Copyright 2012 by WTOP. All Rights Reserved.)

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