You recently filed your tax return and learned that you owe the IRS money and must pay them, but you don’t know what options are available to you.
Here are several options for making a tax payment to the IRS:
If you paper filed your tax return, you can mail the tax return, payment voucher, and check to the address listed in the tax return form instructions for your state.
You will want to make sure you don’t staple the voucher and payment to the return. The check should be made payable to “United States Treasury” and you will want to enter your social security number or employer identification number, along with the year and form number on your check. This will ensure that if the returns gets separated from the check, the IRS will still be able to record and process the payment.
I always advise my clients that any paper documents mailed to the IRS should be sent certified with delivery confirmation. This will ensure that if the IRS misplaces your package, you have proof that it was sent by the due date, and you won’t be subject to late filing penalties.
If your tax return was e-filed, you simply mail the payment voucher along with the check, and write the same information mentioned above on the check and follow the same mailing instructions.
2. IRS Direct Pay
If you want to make a one-time electronic payment to the IRS for your 1040 tax return (or 1040 extension or estimated payment) from a bank account, then IRS Direct Pay is for you. There is currently no fee charged for this method of payment.
If you want to make a one-time electronic payment to the IRS using a credit card or debit card, then you can use one of the service providers the IRS partners with. Note that there are typically processing fees associated with this method of payment.
EFTPS.gov is best suited for all types of taxpayers that must make any type of routine federal tax payments to the IRS from a bank account. Some examples of other payment types include extension payments, estimated tax payments and payroll tax deposits.
You first must enroll in EFTPS by clicking on the enroll link on the IRS website. The enrollment process could take up to a month or even longer, because the IRS sends a letter to your mailing address with a PIN that will be used to logon to the system.
4. Installment Agreement
If you are an individual or business taxpayer who doesn’t have the cash up front to pay your taxes, and wants to pay the IRS in installments, you should consider applying for an installment agreement with the IRS online. There are different types of plans available depending on the payment amount and the term of the agreement.
There will be fees associated with the agreement (usually you pay a setup fee, along with penalties and interest until the amount is paid off). Also, note that in most cases you must setup automatic payments, and the monthly installment payment will be automatically deducted from your checking account.
Keeping It Paperless
As you can see, there are many different ways to pay the IRS when you owe taxes.
We recommend paying online versus a sending check because we are a completely paperless CPA firm.
If you do decide to make an online payment, make sure to print to PDF the IRS payment confirmation receipt to your computer for your records, and send a copy of the receipt to your tax return preparer.
They will thank you for keeping them in the loop on any tax payments you’ve made the the IRS.