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How to Make IRS Payments for Your Taxes

September 26, 2019

Credit cards are just one of the many easy ways to pay the IRS.

Electronic IRS payments are the most popular and preferred payment method, used for 89 percent of returns in 2018.

Check for these five qualities to make sure your tax pro is qualified and the best for you.

It’s 2019, but the IRS won’t accept your Bitcoins, 3-D printed money, or Venmo. When you owe after filing tax returns or have back taxes to deal with, you to have to make IRS payments with actual money, but how?

The IRS ensures there are multiple ways to pay them back. While you can go through the hassle of making an appointment at your local Tax Assistance Center to pay in cold hard cash, there are easier ways to pay up without having to leave the house.

Electronic payments are the most popular and preferred payment method, used for 89 percent of returns in 2018. But if you’re a taxpayer who prefers to pay offline, you’ve got choices, too.

Review these payment options to figure out how to make IRS payments that work for your financial situation.

4 Easy Ways to Make IRS Payments: Infographic

The 4 Easiest Ways to Make IRS Payments

1. IRS Direct Pay

For making payments to the IRS as an average taxpayer, one simple method is IRS Direct Pay.

IRS Direct Pay can be used for filing individual tax bills or making estimated tax payments directly from your checking or savings account to the IRS. This feature has the added advantage of being free of charge.

Use IRS Direct Pay to pay directly from your checking or savings account.

To use Direct Pay, you need to have a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN).

While you can use IRS Direct Pay to make an online payment on your regular web browser, you can also use Direct Pay on the IRS2Go app on your mobile device. You can find the free IRS2Go mobile app on Google Play, the App Store, or Amazon.

If you request it, you will get a confirmation notification via email as soon as you make a payment using Direct Pay. The bank account information you provide is not stored in the IRS systems.

Direct Pay does have some limitations. It is only available Monday through Saturday from midnight to 11:45 p.m. ET and Sunday from 7 a.m. to 11:45 p.m. ET.

The system for Direct Pay does not save your information, so you’ll have to re-enter everything if you return to make another payment. You also cannot make more than two payments within a 24-hour period. 

2. Electronic Federal Tax Payment System (EFTPS)

Another secure payment method offered by the government is the Electronic Federal Tax Payment System (EFTPS). Both businesses and individual taxpayers can use EFTPS to pay their taxes.

Securely pay the IRS with EFTPS, which is available 24/7.

You must have a secure Internet browser with 128-bit encryption to access the EFTPS website. To log on and enroll, you must have the following three items:

  1. EIN or SSN
  2. EFTPS Personal Identification Number
  3. Internet Password

Once you enroll, the EFTPS system will save your information so it’s easier to make payments in the future.

For payroll taxes, businesses must use EFTPS for deposits. Otherwise, you could be penalized. 

EFTPS is highly suggested for large payments. Using EFTPS, you can make income tax payments, employment tax payments, and estimated and excise tax payments.

This payment method is free to use, and you’ll receive confirmation emails with every transaction you make. Another similarity to Direct Pay is that you can cancel or edit payments up to two business days before the scheduled payment date.

The site is available 24/7 and can be accessed via computer or smartphone. Additionally, you can schedule payments for up to 365 days in advance.

3. Payment by Check or Money Order

Not a fan of paying online? You can pay via mail with a check, money order, or cashier’s check made payable to the U.S. Treasury.

Mail the IRS a check or money order made payable to the U.S. Treasury.

Make sure to include the following information on your check, money order, or cashier’s check:

  • Your name
  • Address
  • Social Security number
  • Daytime phone number
  • Tax year
  • Tax form or tax notice number

You’ll want to send this form of payment along with a completed Form 1040-V. Don’t staple or paperclip the check or money order to this form.

Be sure to mail both the form and payment method to the address that corresponds to your state listed on Form 1040-V. 

4. Payment by Credit or Debit Card

To process payments made by debit or credit cards, the IRS uses standard service providers and business/commercial card networks. The three payment processors they use are PayUSATax, Pay1040.com, and Official Payments.

Swipe your debit or credit card with an IRS service provider.

The provider will charge a fee, which varies based on the service provider used. This processing fee may also be tax-deductible depending on your situation. No part of the service fee goes to the IRS. 

Keep in mind that you usually can’t cancel payments made by debit or credit card.

Not all tax forms are payable this way and some higher tax debts may require some extra coordination with your provider. However, it’s an easy way to settle your tax debt and gain some quick peace of mind.

What to Do If You Can’t Make Your IRS Payment

If you aren’t able pay the IRS for any reason, you’re not out of options.

You may be able to qualify for an IRS installment agreement. This payment plan would allow you to make regular payments that are more affordable for you than your entire balance at once.

Depending on your circumstances, you also could be eligible for an Offer in Compromise, which could let you settle your tax debt with the IRS for less than you owe.

To figure out what options you qualify for, contact us. One of our tax professionals can help you find the best tax debt relief solution for your situation.

The Top 5 Ways to Pay IRS Tax Debt in Full

July 20, 2018

Mail box full of tax letters

When you owe Uncle Sam money, it can make a ding on your finances and everyday life. That's why if you owe, you must pay IRS tax debt ASAP.

Check for these five qualities to make sure your tax pro is qualified and the best for you.

Taxes are a sure thing if you live in the U.S. And when you owe Uncle Sam money, it can make a ding on your finances – and everyday life. That’s why if you owe, you must pay IRS tax debt ASAP.

Thankfully, the IRS offers several programs and services that help taxpayers that owe them money. The method you choose will depend on your specific situation with the IRS. Knowing what to do isn’t always easy. First, analyze your situation and organize all of your financial documents. From there, you can determine if one of these payment methods applies to your situation.

The top 5 methods to find a way to pay IRS tax debt:

1. Repay the full tax debt amount

The fastest and most efficient way to repay the debt you owe to the IRS is to pay the complete amount you owe. This is not an option for many who owe the IRS, which is why the IRS provides other programs and services to make paying your debt possible. Speak with a tax professional to see which IRS payment agreements you may qualify for.

2. Sell your assets (before the IRS takes them)

You may have to say goodbye to your yacht or untouchable sports car if you owe the IRS. By selling assets, you can apply the funds to pay IRS tax debt. Do this as soon as possible before the IRS issues a lien. A lien will make it more difficult to sell your property if you wait too long.

3. Withdrawal from your investment accounts

Do you have any investment accounts like a pension or 401k? If so, you could make an early withdrawal to pay off your debt. If you opt for this route, make sure you pay taxes on the withdrawn money or you could owe the IRS all over again.

4. Dip into property equity

Depending on the housing market, it may be difficult to take out a home equity loan or to refinance. If it makes sense for your situation and the market climate, applying home equity funds can be a viable method for paying your tax debt.

5. Use a credit card or bank loans

Using credit cards or bank loans may seem like merely trading one debt for another. However, the interest rate on credit cards and bank loans tend to be less than IRS interest and penalties.

Don’t wait until the letters pile up

When the IRS sends you a notice to demand federal payment, it’s time to kick it into gear. The IRS wants you to fully pay the debt within 10 days of the notification. This is doable via any of the five methods above to repay your tax liability. If you’re unable to use these resources or have a tax debt amount that you know you can’t pay, a tax professional can negotiate with the IRS on your behalf to reach an agreement. Don’t wait until your next notice letter hits the mailbox to pay IRS tax debt in full!

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