As the tax deadline approaches, there are options available to simplify the payment process. However, not all payment methods are equivalent, and some may entail additional processing or service fees on top of your owed taxes. Here are four ways to facilitate your tax payments to the IRS, and some recommendations if you are unable to pay.
The first of these tricks is simple Direct Bank Account Transfers: A Convenient Way to Send Money. You can utilize the electronic payment system via your e-file software or by utilizing the “Direct Pay” feature accessible on the IRS website. Usually, the date you initiate the payment request is deemed the day you paid your taxes. However, it may take up to two business days for the actual funds to be withdrawn.
Credit/debit cards
If you use tax preparation software, you can file your taxes and make payments while choosing the bank account for the debit transaction. Opting for the IRS Direct Pay feature involves following five steps to complete your tax payment. Keep your prior year return(s) and Social Security numbers within reach, as the IRS uses them to authenticate your identity.
It’s possible to use your cards for making tax payments online, via mobile devices, or over the phone. However, only IRS-approved third-party vendors can provide this payment option, and convenience fees apply to such services. The approved payment methods vary for each of the three providers, but they all accept major card brands like Visa, Mastercard, Discover, and American Express. Additionally, Paypal and Click to Pay are accepted by all vendors.
The agency partners with three firms – payUSAtax, Pay1040, and ACI Payments – who impose a flat fee of $2.20 to $2.50 for consumer debit cards and a percentage charge ranging between 1.85% to 1.98% for credit cards. It’s crucial to verify the fees as they can be quite substantial. For example, paying a $5,000 tax bill using a credit card could cost up to $99. Such fees may offset or nullify any credit card rewards you receive.
Paying by money order or check
Suppose you prefer to pay via traditional means. In that case, you can write a check or money order for the exact amount of your tax liability and mail it in an envelope with the corresponding form voucher for your tax return, such as 1040-V for individual tax returns (Form 1040, 1040-SR, or 1040-NR). Provide your name, Social Security number, address, and the exact tax balance due on the vouchers to ensure proper processing. The amount indicated on the voucher should match the enclosed check or money order.
To ensure a smooth submission, the IRS has established certain administrative guidelines for sending a check, such as making the payment to the “United States Treasury” and avoiding stapling the checks to the voucher. Verify the regulations to guarantee an efficient payment process.
Additionally, you must confirm the appropriate IRS office for mailing your check and voucher. Different types of payment and states have specific IRS offices designated for this purpose. The payment vouchers usually provide the IRS offices’ addresses in their instructions, or you can visit the IRS website for this information.
A pro tip is to mail your payment with a certified tracking number to gain peace of mind and have a paper record. Nevertheless, the IRS advises considering alternative electronic payment methods that are more secure, faster, and more convenient.
What about paying cash?
The IRS website states that taxpayers can exclusively pay their tax liability in-person at any of the 7,000 participating retail partners across the country. These retail partners include well-known stores such as Dollar General, Family Dollar, CVS Pharmacy, Walgreens, Pilot Travel Centers, 7-Eleven, Speedway, Kum & Go, Royal Farms, Go Mart, and Kwik Trip. You can use this map to locate participating locations.
However, before heading out with cash, you must register your payment details with either ACI Payments ($1.50 service fee per payment) or Pay1040.com ($2.50 service fee per payment). After registering, the payment processor will send you a barcode via email, which you can take to a vendor and make the payment in-person.