How and When To Pay the IRS If You Owe Taxes

Realizing that you owe a tax balance when you ‘ve finished preparing your tax revert is never welcome news. But you have a few options for paying what you owe, evening if it ‘s more than the cash you have on hand. You can use a credit card, or you can ask the IRS to let you pay the balance off over prison term .

You ‘ll normally accrue interest and penalties on any unpaid balance after the April 15 filing go steady if you do n’t pay your libra ascribable by that time. But this date has been extended for 2021 tax returns to April 18 in 2022 because April 15 falls on a vacation.

File an extension

Do n’t take that completed tax return and your debt at confront value if you prepared your return yourself. You can get an automatic elongation of prison term to file your tax render by submitting form 4868 to the IRS by the April ascribable date rather. This gives you until October 15 to thoroughly review and double-check your render, or to have person else do it for you .

expect for deductions that you might have missed or any miscalculations you might have made. Consult a tax professional or use trust tax software if you have n’t done then already. You might be eligible for a tax accredit or a discount that you overlooked because you did n’t even know it existed .

The goal is to reduce your preliminary tax debt, if at all possible. But there ‘s a caution here. You ‘re supposed to pay your integral tax libra at the fourth dimension you submit mannequin 4868 to ask for an propagation, based on what you think you ‘re going to owe according to your master calculations .

Do n’t worry if you end up overpaying on your tax circular. The IRS will send you a refund. At least remit a much as you can if you do n’t have enough money on hand to pay the entire balance due. Penalties and interest will accrue on any unpaid balance .

Tax-filing due dates in 2022 for 2021 returns and for paying any taxes ascribable on those returns have been extended to some residents in response to assorted disasters in those areas. These states include Colorado, Illinois, Kentucky, Arkansas, Tennessee, Washington, and Puerto Rico. You can consult the IRS catastrophe respite announcements to determine you ‘re effected.

Meet the Deadline for the extension

The IRS must receive Form 4868 on or before the tax filing deadline, which is normally April 15, unless that day falls on a weekend or vacation. It would be the next business day in this event. This happens in 2022, when the due go steady for 2021 tax returns is pushed back to April 18 .

The IRS will charge a late filing punishment, a late requital penalty, and interest on any amateur balance wheel you owe if you do n’t file your hark back or an extension on meter and if you besides fail to pay on fourth dimension. But you ‘ll at least avoid the late-filing penalty if you file an elongation by the April due date, which is a brawny 5 % of the taxes you owe for every month your return is belated. then be sure to file your rejoinder by the exsert deadline in October .

This penalty increases to $ 435 or 100 % of the taxes you owe, whichever is less, if you ‘re 60 days late or more.

Your Options for payment

You can pay any tax you owe on-line, send the IRS a newspaper check, or ask the IRS for a fiddling reason. You can much work out payment terms if you ‘re truly in a fiscal tie down .

The Electronic Federal Tax Payment System

The Electronic Federal Tax Payment System ( EFTPS ) is a web overhaul operated by the U.S. Treasury Department for processing federal tax payments. You must set up a profile bill with your bank account information. But you can then make payments for respective tax obligations, including extension payments, estimated taxes, or even tax balances for former years .

You can schedule a payment in gain. It will automatically be withdrawn from your bank report on the date you designate .

IRS Direct Pay

The IRS besides offers direct Pay, a like world wide web service. This locate does n’t retain your bank account or personal information, so you ‘ll have to reenter all this datum every time you want to make a payment .

You can go back in and change or cancel a payment improving to two business days before the pay-on date if you schedule the payment for a date in the future .

U.S. Postal Service

You can besides send your money to the IRS the antique way—just chain mail a check. The IRS has different addresses for payments depending on the nature of the requital and where you live. You can find a full list of addresses on the IRS web site to help you identify which one you should use.

Set up a payment design

The IRS offers payment plans if you ca n’t pay all or flush anything you owe right away. The important thing is that you do n’t ignore your betroth, hoping that it will go away, because it wo n’t .

You can set up a monthly installment agreement with the IRS, allowing you to pay what you owe over time. You can flush decide how much you want to pay per calendar month, at least to some extent. The integral balance has to be paid off within 72 months, so your minimum requital would be what you owe divided by 72. Leave some room for sake and penalties when you ‘re making your calculations .

You ‘re not prohibited from paying more than the total you ‘ve committed to in any month. You can retire the debt preferably and minimize interest charges by doing thus. The IRS will even charge the late-payment penalty vitamin a well as interest, but it ‘s reduced to 0.25 % a month. There ‘s a erstwhile setup fee of $ 130 as of 2022, increasing to $ 225 if you do n’t apply on-line. But if you do apply online and if you agree to have the monthly payments taken from your deposit history by direct debit, this erstwhile process tip drops to $ 31. And the IRS offers a low-income setup tip choice of $ 43 if you qualify. direct debit is required if you owe more than $ 25,000 .

You do n’t have to qualify for the installment agreement by submitting a collection information affirmation to prove your assets and income, at least not if you owe less than $ 50,000. You can apply on-line using the Online Payment Agreement Application on the IRS web site .

other Options

Depending on how much you owe and your credit, you might want to look into individual loanword options if you ca n’t pay by the tax deadline. You ‘ll probably pay more in the way of sake. But this would allow you to pay off your tax debt and avoid a payment plan with the IRS. Use a loanword calculator to determine whether this choice makes sense for you .

The Taxpayer First Act has allowed the IRS to accept credit or debit batting order payments since 2020 .

seek advice from a tax professional to evaluate early ways to resolve your tax debt if you ca n’t afford to pay off your tax debt monthly or if you owe more than $ 50,000. The IRS besides considers offers in compromise. The agency might be will to accept an sum less than what you owe under certain circumstances, or it might defer payments until such time as you get spinal column on your feet financially .

frequently Asked Questions ( FAQs )

How do I pay quarterly estimated taxes?

You may have to pay quarterly estimated taxes to avoid a penalty at the end of the year if you do n’t have adequate taxes withheld from your paychecks or if you receive income from self-employment or another source that does n’t withhold taxes on your behalf. Use shape 1040-ES to calculate your calculate taxes, then submit your payments via mail or through the IRS on-line EFTPS payment portal vein before the quarterly deadlines .

How do I pay state taxes?

Each submit has its own agency for handling tax filing and payments. Check your state agency ‘s web site for more information about how to file and to pay your state and local taxes .

What happens if you don’t pay taxes?

You may be subject to penalties and interest on the delinquent balance wheel if you fail to file or pay taxes on time. These accumulate the longer you go without making payment. The IRS can take far solicitation actions if you accrue a boastfully adequate poise, such as putting a spleen against your bank accounts or home. Reach out to the IRS promptly to make arrangements and avoid these penalties if you think you will have trouble paying your taxes.

Key Takeaways

  • Asking for an extension of time to file your tax return doesn’t give you more time to pay, but it can be helpful so you can make sure your return is correct and you’ve claimed every deduction and credit you qualify for.
  • The IRS provides two electronic payment systems, Direct Pay and EFTPS, that make it very easy to arrange payment electronically.
  • You can apply for an installment agreement with the IRS if you can’t pay in full right away. But your outstanding balance will accrue interest.

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