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So you’ve reached the point where you’ve done all the paperwork and now it’s time to actually fork over your hard earned cash to Uncle Sam. Only you’re not entirely sure how to do that. You’ve been so focused on actually filing taxes you haven’t even considered what the process for paying is.
Do they take checks? PayPal? Credit cards? What are your options here? In fact you have a few avenues at your disposal, including one that the IRS has set up to be a quick, mostly painless way to satisfy your tax obligations.
This is the best scenario: you have a payment but it’s small enough that you can afford to pay it all right away. No payment plans, no more worrying; just one payment and you’re done. Well, you’re in luck, because the IRS takes credit cards.
But, of course, there’s a catch. They don’t take credit cards directly. You have to go through a payment processor. You already have a PayPal account, can you use that? Nope. There are a select number of processors that take IRS payments, all with varying fees attached to them.
It may be annoying, but at least your obligations are satisfied. Now you can move on to bigger and better things – like literally anything else!
Can’t pay your tax obligations all at once? Then you’re like most taxpayers out there who owe money to the government. If you fall in this category, then you need to set up a payment plan. Luckily, it’s fairly simple.
First you must apply for the payment plan. You can apply online if you owe less than $50,000 or submit the Form 9465 and Form 433-F tax forms if you owe more than that. Generally, you’ll be approved for the payment plan automatically, so you shouldn’t worry about being denied. The IRS wants the money you owe and they’re happy to go the route you want.
Now every month you’ll make a payment to the IRS, which can be automatically set up to come out of your bank account on a day you choose. The payments will continue until you’ve paid everything off.
Keep in mind if you have another payment come up during next year’s taxes, it doesn’t automatically add to your current plan. You must submit a new payment plan form and it will be added to your current payments. If you don’t, you’ll have an outstanding balance and could face penalties.
As mentioned, the IRS has set up their own site for taxpayers to pay what they owe. Even better for small business owners, this system, the Electronic Federal Tax Payment System (EFTPS), lets you pay both federal taxes and other obligations like quarterly estimated taxes.
Simply head to the EFTPS website and click Enroll. Here you’ll enter some basic info for your business or your personal use like name, address, social security number. You’ll also enter your bank information so you can automatically pay.
Now you can pay any taxes you already owe from taxes. You can pay everything right away or set up your bank account to automatically withdraw money whenever you decide. This way you don’t have to log on every month/two weeks/whatever to pay what you owe to the government.
Did you owe taxes this year? How do you pay the IRS?