Paying taxes – the IRS makes it easy

Your Guide to State, Local, Federal, Estate + International Taxation

paying taxes, paying your taxes, how to pay taxes, IRSI think you would agree with me that we like to get paid for the amount that is owed to us. We might receive a check or for many of us it’s a direct deposit. The bottom line is that however we receive it, we expect that if an amount is owed to us, we’ll be paid. The IRS is no different. If a taxpayer has an amount due, the IRS holds the expectation that the taxpayer will remit the amount that is due. To help facilitate the taxpayer in making payment of the tax debt, the IRS offers a number of methods for paying taxes.

Electronic withdrawal

You can choose to have the funds electronically withdrawn from your bank account when you file your taxes electronically. You’ll need to inform your tax preparer and provide your bank account information including routing and account number. It’s important that you inform your tax preparer upfront that it is your desire to have the amount due electronically withdrawn. Once the return is transmitted electronically to the Service, your tax preparer does not have the ability to change the method of payment.

Credit or debit card

I’m often asked if you can pay your taxes by credit card. You can use either a credit or debit card for paying taxes. Credit and debit card payments are processed using a third-party service provider. The instructions to the 1040 list three providers that can be used to process credit card tax payments. The service fees for these currently range from 1.87% to 2% of the transaction amount. The fees are set by the service providers so that actual amount of service fee is ultimately up to the provider.

IRS Direct Pay

The IRS offers the IRS Direct Pay system which allows you to initiate payments directly from your checking or savings account. There is no fee for using this service. The IRS Direct Pay system provides an instant confirmation that the payment has been submitted and can be used to pay tax bills and make estimated tax payments. The EFTPS system is similar to the direct pay system; however, to utilize EFTPS you must be enrolled.

There’s an app for that

Only use your mobile device? The IRS has an app for that. You can download the IRS2Go app and make payments directly through your mobile device. In addition, you can use the app to check your refund status and get tax tips.

Cash

Maybe you just don’t trust the banks and use cash for all of your financial transactions. The IRS has implemented a new payment option for individuals to make their tax payments using cash. There are over 7,000 7-Eleven stores nationwide that individuals can make their tax payments at. The PayNearMe, as it is referred to, is available in 34 states. Currently there are no locations in Arizona. You must register with OfficialPayments.com prior to using this option and there is a fee for using the payment service. Once registered, the taxpayer can make their payment at a participating 7-Eleven store. The payment is generally posted to the taxpayer’s account within two business days.

The IRS provides a number of options to taxpayers for paying taxes. If it was as easy to acquire the funds to pay the tax, we’d really be on to something.

Cheryl Dickerson, CPA