Payment Options For Individuals Owing Taxes

by | Mar 23, 2017 | Uncategorized

As you recall from previous posts the usual tax deadline of April 15th was extended this year until Tuesday, April 18, 2017.  This gives all Americans an additional weekend to get their paperwork in order and file their returns.  Taxpayers owing taxes can now choose to repay taxes with new payment options including electronic options.  These payment options make it easier than ever for individuals to pay their taxes electronically.  Also taxpayers can electronically request an extension of time to file but not to extend time to pay.  Your taxes will still be due by the stated return date.

Electronic Payment Options

  • Electronic Funds Withdrawal gives taxpayers the opportunity to pay owed taxes from bank account when filing their tax return electronically.
  • Direct Pay allows payment for taxes securely and directly from a taxpayers checking or savings account.  This free online tool is offered on IRS.gov without charging fees or the need to preregister.  Taxpayers can schedule their payment up to 30 days in advance and confirmation will be received once payment is submitted.
  • Using credit or debit cards to pay online, by phone, or a mobile device through authorized processors for a fee.
  • Uploading IRS2Go mobile app offers taxpayers another payment option with free Direct Pay or an approved processor for a fee.
  • A free service, Electronic Federal Tax Payment System allows taxpayers to enroll and pay for taxes by phone or online.  A taxpayer can enroll in the free service by visiting eftps.gov or calling 800-555-4477.
  • Taxpayers can pay with cash using the PayNearMe option at participating 7-Eleven stores.  Taxpayers can complete this four-step process before the tax deadline to avoid any interest and penalty charges.  Keep in mind payments can take five to seven business days to process so plan ahead of due date.  The following are the steps for this payment process:
    1. Visit www.officialpayments.com and follow instructions to make a cash payment with PayNearMe.
    2. Taxpayers will receive an email from Official Payments confirming and verifying your information, process may take two to three days.
    3. You will receive an email with a link that includes your payment code and instructions.
    4. Go to the retail store listed on your email, have clerk enter payment code and retain your receipt for your records.

Installment Agreements

Individuals who owe taxes and cannot pay the balance in full have several relief programs they may qualify for.

  • Payment Plans can be set up for individuals who owe $50,000 or less in combined tax, penalties and interest.  The online payment agreement can be set up for 120-days or less, or a monthly payment agreement for up to 72 months.
  • Offer-In-Compromise Agreement between the taxpayer and the IRS settles the taxpayer’s tax liabilities for less than amount owed.

Estimated Tax Payment Dates

For those who are self-employed or owe taxes for prior or current tax year the tax deadline is nearing.  The IRS expects taxpayers to keep up with their tax payments and you can do so by filing Form 1040-ES along with an estimated payment.  The following are the dates for payments:

  • First-quarter payment, includes earnings from January through March, is due April 15.
  • Second-quarter payment, includes earnings from April through May, is due June 15.
  • Third-quarter payment, includes earnings from June through August, is due on Sept. 15.
  • Fourth-quarter payment, includes earnings from September through December, is due on Jan. 15, 2018.