29 May 2020

How to Keep the IRS Dragon Off Your Back!

If you owe taxes, the IRS has made it easy for you to pay. There are several options where you can pay immediately:

Electronic Funds Withdrawal. Pay using your bank account when you e-file your return.
Direct Pay. Pay directly from a checking or savings account for free.
Credit or debit cards. Pay your taxes by debit or credit card online, by phone, or with a mobile device. (Fee required)
Pay with cash. You can make a cash payment at a participating retail partner. (Fee required)

It is best for all taxpayers to file and pay their taxes on time. (Although, if that happened I would be out of work.) If you cannot pay the full amount due, by the due date, consider one of the payments agreements the IRS offers:

An agreement to pay within the next ten days.
A short-term payment plan to pay within 11-120 days.
Installment agreement. You may be able to make monthly payments, but you must file all required tax returns first. Apply for an installment agreement through the Online Payment Agreement tool.
Businesses owing $25,000 or less from the current and prior calendar year, who can pay what they owe within 24 monthly payments, can use the online application.

What about estimated payments?

Taxpayers can pay their estimated taxes electronically anytime, before the end of the tax year. Most taxpayers make estimated tax payments in equal amounts by the four established due dates. IRS provides two free electronic payment options:

IRS Direct Pay allows individuals to pay from their bank account for free, up to 30 days in advance. . There’s no need to register ahead of time, payments are made online in five easy steps.
The Electronic Federal Tax Payment System (EFTPS) allows individual AND business taxpayers to pay their federal taxes electronically online. Through the EFTPS, taxpayers can schedule their tax payments up to 365 days in advance. This means you can set it up at the beginning of the year and never miss a due date!

Direct Pay and EFTPS are both free payments options, and taxpayers can schedule their payments in advance and opt in to receive email notifications about the payment.

The IRS continually reminds taxpayers to watch out for email schemes. You will ONLY receive an email from Direct Pay or EFTPS if you’ve requested the service.

Not sure if you are withholding enough?

Whether you have paycheck tax withholding, are making estimated tax payments or some combination of the two, the IRS encourages everyone to use the IRS Withholding Calculator to perform a quick “paycheck checkup”.