The only thing worse than paying taxes is paying a penalty because your payment was late.
In 2017, the IRS assessed $11.0 billion in penalties on individuals, estates, and trust tax returns.
If you don’t want to pay a penalty, file your return and pay your taxes by the April 15 deadline.
When you don’t pay by April 15, there’s a penalty. The IRS charges you 0.5% of your unpaid taxes every month. The penalty continues until you pay or the amount reaches 25% of what you owe.
Your particular situation determines if you need to pay now or with an installment plan. If you file your return on time and use a payment plan, the late-payment penalty is 0.25%
Keep reading to learn the best ways to make an IRS payment on time.
How to Pay Your Taxes
If you didn’t withhold enough money to cover your tax bill, you have many options for making your payment to the IRS.
1. Visit a Taxpayer Assistance Center
If you’re uncomfortable paying online, you can pay in person at an IRS office.
There’s nothing wrong with a face-to-face payment. It’s smart if you’re concerned about identity theft or cyber-hacking.
You can pay by check, money order or cold hard cash at your local IRS office. Call and make an appointment before visiting the office.
2. Use Snail Mail
If you owe taxes use Form 1040-V to pay what you owe. Your tax software or accountant provides the voucher form.
Send a personal check, money order or a cashier’s check payable to the U.S. Treasure in an envelope with the form.
Don’t staple the check or money order to the voucher. Put your name, address, phone number, tax form and tax year on your check.
Send payment with Form 1040-V to the address indicated in the tax software.
3. Direct Debit From Your Bank
One of the fastest ways to pay your taxes is a direct debit to your checking account. It’s an electronic fund withdrawal transferring your money to the IRS.
The IRS doesn’t charge a fee for electronic fund transfers, but your bank may. Check before you transfer.
Most tax software programs handle the process. You need your bank’s routing number and your account number from the bottom of a check.
The first 9 digits are the bank routing number. The following numbers are your account number and the check number.
The default payment date is the tax return due date (April 15). You can change it to an earlier date. Don’t pay any later or you’ll face penalty and interest charges.
If you received a filing extension for your return it doesn’t mean you can pay later.
4. IRS Direct Pay
If you don’t want to make your payment through your tax software, there’s another option. You can manage electronic fund transfers through the IRS.gov website.
The free IRS Direct Pay service debuted in 2014. The IRS doesn’t save your bank account information after payment is complete.
You can schedule a payment or pay it the same day. But, you can’t make more than two payments in one day.
Direct Pay works for payments related to Form 1040. These include balance due, estimated, and extension payments.
There are five steps to the IRS Direct Pay process:
- Give Your Tax Information
- Identity Verification
- Payment Information
- Review and Sign the Transaction
- Online Confirmation Number
People who can’t verify their identities must use another payment option. If you decide not to file the transaction you can cancel before submitting it.
5. Pay with a Debit or Credit Card
Some people prefer a debit or credit card payment over sending a check. You can pay your tax bill with a debit or credit card or digital wallet through a third party payment processor.
Third party processors are safe and secure. Fees are different for debit cards and credit cards.
The IRS approves these three payment processors:
All three processors charge a convenience fee. Your credit card may charge interest, too. Total the fees to help you decide if this is the best method for you.
Make sure your tax return qualifies for this payment method. Here are some considerations:
- Not All IRS Forms are Eligible
- Fees Can Differ Between IRS e-file and e-pay
- You Can’t Cancel Payments
- You Can’t Make Federal Tax Deposits
- No Immediate Release for a Federal Lien
- There are Limits on Payment Frequency
Do your research before committing to paying this way.
6. IRS2Go Mobile App
Yep, there’s an app for taxes. If you manage your life from a mobile device download the free app IRS2Go.
Use the app to check your refund status or make a payment through IRS Direct Pay or a payment processor.
7. Use the Electronic Federal Tax Payment System (EFTPS)
The IRS sanctions this service. It’s another electronic method for paying your taxes. You must register and enroll at EFTPS.gov.
There is a three-factor verification and a password.
Once you have an account and PIN number you can schedule IRS payments up to a year in advance. You can make payment changes up to 48 hours before the due date.
This is a good option for people who want to schedule all their estimated tax payments at once.
The service works for any kind of federal tax payment. Use it to pay 1040 balances, extension payments, corporate and payroll taxes.
It’s a secure and free alternative provided by the U.S. Department of the Treasury.
Ready to Make an IRS Payment?
Ready to pay your taxes, but have unresolved concerns? The Silver Tax Group is ready to assist you.
We can help you make an IRS payment or resolve past due taxes. Our determined team of tax attorneys can resolve your tax issues.
Contact Silver Tax Group for your free case evaluation and our lawyers will take care of the rest.