If you find yourself in the undesirable predicament of owing the IRS, here are some things for you to keep in mind so that the situation doesn’t go from bad to worse:
Payment Methods & Tips
- You can pay taxes electronically 24/7 on www.IRS.gov. Just click on the “Payments” tab near the top left of the home page for details.
- Check out IRS Direct Pay to pay directly from your bank account. It’s secure and free and you’ll get instant confirmation that you have submitted your payment.
- Pay in a single step by using your tax software when you e-file. If you use a tax preparer, ask them if they can make your payment electronically.
- Whether you e-file your tax return or file on paper, you can choose to pay with a credit or debit card. One service that our clients often use is www.1040paytax.com.
- If you enroll in the Electronic Federal Tax Payment System (EFTPS) you can pay your federal taxes electronically and directly to the government. You have a choice to pay using the Internet, or by phone using the EFTPS Voice Response System.
- If you can’t pay electronically, you can still pay by a personal or cashier’s check or money order. Just make you check payable to the “U.S. Treasury” and be sure to write your name, address and daytime phone number on the front of your payment. Also, write the tax year, form number you are filing and your Social Security number. Use the SSN shown first if it’s a joint return.
- If you pay by paper check, complete Form 1040-V, Payment Voucher. Mail it to the address listed in the instructions based on where you live.
Balance Owed On Prior Year Taxes
- If you filed your return late, just know that the amount owed reflected on the return is incorrect. This is due to interest and penalties. Thus, once you file your return, the IRS will send you a notice indicating the correct amount to satisfy your liability.
- If you have moved since you last filed a return with the IRS, make sure that you submit Form 8822 so that you can receive all future communications. The last thing you want is for the IRS to think you are ignoring you and then begin aggressive collection actions (e.g. liens, levies, wage garnishments, etc).
Inability To Pay Balance Off With One Payment
- If you can’t pay off the balance with a single payment, it’s in your best interest to send in as much as you can to minimize the penalties and interest that will be assessed.
- The IRS has many options for you to pay your balance off, including payment plans. This post on our sister site talks about setting up a guaranteed installment agreement and is well worth the read.
Need assistance with your tax balance? Give us a call at 844-TAXES88 (844-829-3788) and we’d be happy to discuss you situation and tell you how we can be of service.