In the past, taxpayers who owed money to the IRS had to send in checks. There is currently a plethora of alternatives available.
Those who have used Free File or another guided tax preparation service will be familiar with EFW, or electronic funds withdrawal. The ability to send payment straight from your bank account is a basic feature of most tax preparation programs.
If you want to pay your taxes in a different way, the Internal Revenue Service (IRS) recommends using Direct Pay, EFTPS, or a credit/debit card to pay your taxes online instead of sending a check through the mail. However, we also accept cash and wire transfers on the same day.
Filing your 2023 federal income tax return
To get more information on the costs of several methods of making your federal income tax payment to the IRS, as well as the benefits and drawbacks of each method, click on the links provided below.
IRS Direct Pay
Paying your taxes with IRS Direct Pay is one of the quickest and least expensive ways to settle your tax debt. You may use this convenient and free service by visiting the IRS Direct Pay webpage and entering your bank account information. Up to two business days, before it is due to process, you can make changes to or cancel a payment.
Although registration is not required, identification verification will be required before any payment may be processed. For security purposes, the Direct Pay website will need you to verify your identity by entering the same information you used on a past tax return, such as your name, address, Social Security number, date of birth, and filing status.
From midnight to 11:45 p.m. EST, Monday through Saturday, and from 7 a.m. to 11:45 p.m. EST on Sunday, taxpayers can access Direct Pay.
Cost: Free.
Electronic funds withdrawal (EFW)
Electronic tax payments are typically included in e-filing programs like IRS Free File and other tax preparation software. Enter your financial details to approve a direct debit withdrawal and make a payment. If you hire a human tax preparer and have them e-file your taxes, they can also send your payment through EFW.
Cost: Free. Check with your bank regarding any associated fees.
The Electronic Federal Tax Payment System (EFTPS)
EFTPS is an additional online payment option provided by the IRS. Registration is required to utilize it, and the IRS estimates that it will take five to seven days.
Visit the IRS EFTPS website, provide your personal and banking details, and then look out for your PIN in the mail to complete your enrollment. When it arrives, you’ll go online to change the default password and approve a direct debit from your bank account.
You may see your payment history for up to 15 months, modify or plan upcoming payments, and make a payment through voice or the internet at any time, as EFTPS is available around the clock.
In case any concerns regarding payments arise, you can contact the available customer care representatives for assistance.
Cost: Free.
Mobile via IRS2Go
IRS2Go, the agency’s official mobile app, is compatible with both Apple and Google’s mobile operating systems. You may use the app to make free or fee-based payments using the IRS Mobile Direct Pay service. There is no signup procedure necessary.
Cost: Free.
Debit card
PayUSAtax, Pay 1040, and ACI Payments are the three official payment processors recognized by the IRS for accepting debit card and digital wallet payments. You can then select a processor and pay by phone or online. The transaction charge for this method is around $2.
You can pay online by visiting the site and entering your payment information. The money is sent to the IRS by the processor.
Cost: $2.20–$2.50 per payment (processing cost, not IRS).
Credit card
Credit card tax payments are processed exactly like debit card payments. Instead of a flat processing fee, you will be charged a percentage of the total amount of your debt when you pay with a credit card. The Internal Revenue Service provides a table that compares the costs charged by various payment processors.
You may pay your IRS tax bill online with a credit card by visiting the website of one of the three third-party payment processors approved by the IRS. The money is sent to the IRS by the processor.
Cost: 1.85% to 1.98% of your payment, with a minimum price of $2.50 to $2.69 (the processor, not the IRS, receives the fee).
Same-day wire transfer
A wire transfer is the electronic transmission of money through a financial institution or a non-financial service provider. The Internal Revenue Service (IRS) may accept payments made through the same-day transfer services of some banks. In order to make electronic payments to the IRS, you must first create a duplicate of the IRS’s Same-Day Taxpayer Worksheet for each payment. After you’ve completed it, take it to your bank to schedule a payment.
Cost: $25, depending on your institution
Cash
You might be able to pay your taxes with regular old cash, believe it or not. To make a cash payment to the IRS, visit their website and click the “Pay with Cash at a Retail Partner” button. The IRS confirms your information and sends you a confirmation email. A second email is sent to you with a payment barcode and further instructions. The next step is to visit the business mentioned in the email, have the cashier scan your code, and then make your payment. An acknowledgment and verification of your payment will be sent.
Family Dollar, Dollar General, CVS Pharmacy, 7-Eleven, Walgreens, Go Mart, Speedway, Kum & Go, Kwik Trip, and other carefully chosen independent stores are among the participating businesses.
Keep in mind that some IRS processing centers also accept cash payments. Using the IRS’s TAC lookup tool, you may find a local Taxpayer Assistance Center and learn about the services they offer.
Cost: $1.50 to $2.50 for each payment.
Conclusion
In conclusion, it is crucial to know your payment alternatives while dealing with the IRS in order to efficiently handle your tax responsibilities. The tax system might be confusing, but there are several options for making payments and planning the tax strategy that can help you minimize your tax liability. Taking the initiative to resolve your tax debt is essential, whether through installment arrangements, an Offer in Compromise, or other means of payment. In addition, getting advice from a tax expert or using tools like the IRS website may help you make educated choices. In addition to saving money in the long run by avoiding fines and interest, being on top of your tax payments will give you peace of mind.
FAQs
Q1. How do you pay your federal taxes?
Taxpayers can submit their payments to the IRS in a variety of ways. Tax preparation software and professional tax preparers both provide direct payment options. You can use IRS Direct Pay, EFTPS, a debit or credit card, a wire transfer, a cheque, or even cash to make a payment.
Q2. Can you file taxes and pay later?
After the tax filing deadline, late payment penalties and interest will be applied to any tax balances that have not been paid in full. The Internal Revenue Service (IRS) provides a number of payment options to assist you to pay off your tax burden more gradually or in installments.
Q3. Can I pay IRS taxes with a credit card?
The Internal Revenue Service accepts credit card payments. Through designated third-party processors, the IRS will accept credit card payments. It’s crucial to weigh the benefits and drawbacks of each payment method before settling on credit card payments.
Q4. What is an installment agreement, and how does it work?
You can settle your tax bill gradually through an installment arrangement. You can make installment payments until the balance is paid in full. You must fulfill specific requirements and apply to the IRS for an installment arrangement. It’s important to remember that interest and penalties may still be assessed even if you choose to pay in installments.
