How to Make an Online Tax Payment
Without Feeling Overwhelmed
Nobody likes receiving a tax bill. You should be aware of your options for making tax payments if you do owe money. In the past, sending a check to the IRS was pretty much the only option. There are several options available right now. Let’s learn how to choose the best plan for you while filing your taxes online. Here is a list of some popular IRS payment choices, their associated costs, plus advantages and disadvantages for each.
Pay directly
If you're looking for a free and convenient way to pay your taxes, direct pay is one option. Using this method, you can pay a tax bill instantly from your checking or savings account and receive confirmation right away. You can make modifications or cancellations to payments that have been booked up to 30 days in advance as long as it’s done at least two days before the scheduled payment.
Federal Tax Payment Electronic System
You can pay your tax bill through the Electronic Federal Tax Payment System as well. You will need your SSN or ITIN, a personal identification number, an internet password, and a secure browser in order to make a payment using this method. It can take up to five days to process your registration in this service after you have completed the initial paperwork, which can be done either online or over the phone. Using EFTPS, you may schedule payments up to 365 days in advance, and you'll receive an immediate confirmation whenever they're made.
Electronic Funds Withdrawal
Using Electronic Funds Withdrawal is an additional alternative for paying taxes, although occasionally your financial institution may impose a small cost. With EFW, you can schedule payments up to 365 days in advance and make one or more installments by direct debit from your bank account. Only those who e-file their federal taxes using IRS Free File, tax preparation software, or a tax advisor are eligible to use this payment option.
Checks or money orders
The IRS now accepts checks or money orders for payment of your taxes. The US Treasury Department should receive these. You must also finish and submit Form 1040-v with your payment. Send your form along with a check or money order to the same address shown on the back of your 1040-v.
Offer a Compromise
If a permanent event, such as a job loss or business failure, prevents you from paying your tax obligation, you can ask the IRS for an Offer in Compromise.
The IRS will accept a reduced tax bill that will be paid in full with this agreement because of your circumstances.To qualify for an OIC, you must have filed your taxes and be up to date on all of your IRS payment obligations.
You won't be allowed to apply if you are currently bankrupt. There is a fee for an OIC application if the Low-Income Certification requirements aren't met.
It accepts debit and credit cards
Using your debit or credit card, you can file your taxes online or over the phone. The service providers charge a fee even though the IRS does not for this service. The three businesses that demand a fee are PayUSAtax, Pay1040, and ACI Payments, Inc. A debit card transaction typically costs between $2 and $4. A percentage of the entire payment amount is used to calculate the cost of credit transactions. For instance, a cost of $19.90 would be charged for a credit transaction of $1,000, while a fee of $199 might be charged for a credit transaction of $10,000. Discover, American Express, Visa, Mastercard, Pulse, NYCE, PayPal, Accelerate, and PayNearMe are all accepted by the IRS.
Tax credits
You can also manage your tax credits online. This is a great way to keep track of your credits all in one place so you know which credits you received. There are a variety of tax credits to take advantage of which lowers your income tax liability. This can be helpful even if you’re a delivery driver for services like Grubhub or Instacart. Your tax bracket and income tax rate can impact which credits you’re eligible for.
Final Reflections
Regardless of your circumstance, you may feel confident about paying taxes online in a variety of ways, from simple to sophisticated, with the help of our comprehensive guide. These are the specifics of how to pay your taxes online without being overwhelmed that were previously discussed.