The IRS typically announces when it will begin accepting tax returns during the first week of January of each year. When the time comes, if you owe taxes, the IRS offers several options to pay immediately through your bank account for free or using credit or debit cards online for a fee; you can also use your phone or a mobile device. You can also make monthly payments, but you must first file all required tax returns and apply for an installment plan with the IRS.
Paying Your IRS Taxes Online
Electronic Funds Withdrawal
One way to pay your taxes online is using the Electronic Funds Withdrawal (EFW), which authorizes the U.S. Department of the Treasury to transfer the specified payment amount from the specified bank account to the Treasury’s account. You do this by setting up a direct debit from your bank account. To use this integrated e-file/e-pay option, you must have e-filed your federal taxes using tax preparation software or through a tax professional. (https://www.irs.gov/payments/pay-taxes-by-electronic-funds-withdrawal)
How To Use DirectPay
If you are a taxpayer with SSNs (no ITINs), the IRS makes available an online payment option where you can set up an electronic fund transfer directly from your checking or savings bank account using the DirectPay service by the IRS website. No prior enrollment is required, but taxpayer identity is verified from the preceding year’s tax return information. There is no fee for this service, and you can schedule payments up to 30 days in advance. You can also cancel or change them up to two business days before you’ve scheduled them. (https://www.irs.gov/payments/direct-pay)
You may also use the IRS official app (IRS2Go), which has several features that allow you to check your refund status, make a payment, find free tax preparation assistance, and sign up for helpful tax tips.
Electronic Tax Federal Payment System (EFTPS) is a free system offered by the U.S. Department of Treasury to pay federal taxes. You will need to enroll on the EFTPS website (https://www.eftps.gov/eftps/), but the site saves your account information. After your enrollment, you will receive your credentials to make payments of any tax due to the IRS. Once you are registered, you are also able to pay by phone by calling (888) 555-4477.
Paying Online by Debit or Credit Card
You can also pay the IRS your tax due by credit or debit card, but you must use one of the integrated IRS e-file and e-pay service providers. Three processors are available, and you can access any of them on the IRS website or through the IRS2Go mobile app.
All the authorized third-party will charge a processing fee, which varies from service provider to provider. It’s usually a flat fee for a debit card transaction or a small percentage of your payment if you’re using a credit card, and your credit card company might charge you interest as well. (https://www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card)
Paying Your IRS Taxes by Mail With Check or Money Order
You can always choose to mail your tax payment using your check or money order. The check or money order must be made payable to the United States Treasury. Your check must show the following information: your name and address, daytime phone number, Social Security number or employer identification number, tax year, and related tax form or notice number. For the information not printed in the check/money order, you should use the memo field on the paper check. The payment must be sent along with Form 1040-V (payment voucher) but don’t staple or paperclip them together.
You need to mail it to the appropriate address shown on Form 1040-V, or you can find the correct address for the nature of your payment and your state of residence on the IRS website.
Setting Up an Installment Plan
If you have difficulty paying the full amount of tax you owe, you can ask the IRS to work with you and set up a payment plan, and the IRS may allow you to pay in installments. The IRS must approve this payment method, and you can apply for a personal online payment agreement. The installment agreement is set up through direct debit using a direct debit plan to ensure that you don’t have to write and mail a check each month.
Paying Your IRS Taxes In-Person
If you prefer to pay in person your tax due, you can go to your local IRS office. To avoid waiting too long, make an appointment online before going to the office. (https://www.irs.gov/help/contact-your-local-irs-office). In addition, you can visit an IRS “retail partner,” which are nationwide retail stores that will transmit your payment to the IRS for you. (https://www.irs.gov/payments/pay-with-cash-at-a-retail-partner)
Either the IRS office or the retail partners let you pay by cash, check, or money order. Just be careful with the choice you will make if your payment is due tomorrow. Generally, it takes the retail partner stores at least two business days, and sometimes up to five to seven days, to process payments.
Filing a Tax Extension
If you cannot complete your federal tax return by the tax filing date, you can typically file for an extension (Form 4868) with the IRS by the tax filing deadline – if you live outside of the U.S., you may be able to get an extension by filing IRS Form 2350. Filing an extension will allow you to push your deadline to October 15, avoiding any potential late-filing or late payment penalties. However, any payments you owe are still due by the original tax due date, which is usually April 15, and You should submit your tax payment along with your extension request. Keep in mind an extension only pushes back the due date for the filing of your tax documents. It does not give you extra time to pay any taxes you may owe.
How Evolution Tax and Legal Can Help With Your Tax Payments
When deciding which payment method will work best for you or if requesting an installment plan or an extension is the way to go, remember to carefully consider your tax payment options’ interest rates and other costs. An installment agreement/payment will not stop interest and penalties. The tax planning attorneys at Evolution Tax and Legal team is here to help you navigate the complex tax world and help you avoid penalties and unnecessary interests, helping you to save money.