Ready to file your federal income tax return? If you owe taxes, don’t forget to pay what you owe by Tax Day. If you pay your taxes in full by April 18, 2017, you’ll avoid additional penalties and interest.
Here’s how you can pay:
1. Pay by cash. It used to be the case that you couldn’t pay your federal income tax bill in cash. Now, however, the Internal Revenue Service (IRS) offers a way for you to pay your taxes using PayNearMe. You can find a list of locations near you here.
To make a payment, you’ll need to visit the Official Payments page and follow the instructions. The IRS will then send you a code that you can take to a participating 7-Eleven store (no, I’m not kidding). The clerk will scan the code so that you can make your payment. The whole process generally takes five to seven business days so plan ahead. Additionally, there’s a fee ($3.99) to use the PayNearMe system.
For more on paying with cash, click here.
2. Pay by check or money order. You can pay by check or money order even if you e-file. To pay what you owe, make your check or money order payable to “United States Treasury” for the full amount due. Write “2016 Form 1040” on the memo line together with your Social Security Number (if you are filing a joint return, write the SSN shown first on your tax return on the memo line). Make sure that your name, address, daytime phone number are on the check; that info may already be printed on your check so no need to duplicate it. Include payment together with a form 1040-V (downloads as a pdf) and mail the payment together with your form 1040-V to the address that corresponds to the state where you live:
While I know that writing a check to pay your taxes can be painful, be smart: don’t write a check that you don’t have the funds to cover. You’re not fooling anybody and there is a penalty for writing a bad check to the IRS ($25 or 2% of the check, whichever is more). It’s not worth it.
And remember that the Internal Revenue Service (IRS) will no longer cash checks over $100 million: you’ll have to break it up into more than one check. You know, in case this is an issue for you.
3. Direct Pay. You can pay your taxes directly from your checking or savings account. To make a payment, click on over to the Direct Pay page. You’ll choose the tax form (1), the reason for payment (2) and tax year (3):
You’ll then need to verify your identity by providing information about your filing status from your last return as well as your name, SSN, birth date and address. Enter the payment amount, payment date and your bank account information. Click on through to the end and you’re done. And don’t worry: the IRS doesn’t keep your bank account information after payments are made and there is no fee for using the system.
The system isn’t available all of the time, so plan in advance so that your payment is timely. According to the IRS, DirectPay is available during the following hours:
- Monday to Saturday: Midnight to 11:45 p.m. ET
- Sunday: 7 a.m. to 11:45 p.m. ET
As with credit cards, IRS Direct Pay won’t accept more than two payments within a 24-hour period, and each payment must be less than $10 million.
4. Pay by wire. Consider a same-day wire from your bank or financial institution. Contact your bank or financial institution – not IRS – for details including fees and deadlines. To make a payment, download and complete the Same Day Payment Worksheet to take with you to make the wire.
For information on making international wire transfers, check out this prior post.
5. Pay by Electronic Funds Withdrawal. Electronic Funds Withdrawal (EFW) is an option that you can use when you file using tax prep software or with a tax professional to pay by direct debit from your bank account. The IRS doesn’t charge a fee to use EFW but your financial institution might (check first to avoid the last minute panic). For more information about EFW, visit the IRS website.
6. Pay by Debit or Credit Card. You can pay what you owe by debit or credit card by using a payment processor. Most accept the most common cards like Visa, MasterCard, Discover, and American Express. The following payment processors are approved by IRS:
(WorldPay US, Inc.)
855-508-0159 Live Operator
877-754-4420 Live Operator
Generally, there’s no limit on the amount you can pay but you are restricted to paying by credit card two times in one year for the same individual tax bill (I have no idea why this is so). High balance payments of $100,000 or more may require coordination with your credit card or debit card provider.
Your card statement will list a credit card or debit card payment as “United States Treasury Tax Payment.”
Third party credit and debit card providers may charge a fee which may vary by provider, card type, and payment amount. Applicable fees for debit cards range from $2.25 to $3.95 while fees for credit cards range from 1.87% to 2.00% (minimum fees apply). The convenience fee paid to your provider will be listed as “Tax Payment Convenience Fee” or something similar and if you itemize your deductions, the fee is deductible.
For more info about paying by debit or credit card, check out the IRS website.
7. Pay using PayPal. You can pay your federal income tax bill using PayPal. The only payment processor which currently allows this feature is:
(WorldPay US, Inc.)
855-508-0159 Live Operator
8. Use Electronic Federal Tax Payment System (EFTPS) to pay by phone or online. To make a payment using EFTPS by phone, call 1.800.555.3453. People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1.800.733.4829. To make a payment using EFTPS online, login and follow the prompts. You can schedule your payment by 8 p.m. EST at least one calendar day in advance of the due date.
You must be enrolled to use EFTPS. To enroll, click on over and follow the steps. After your information is validated with the IRS, you will receive a personal identification number (PIN) in the mail in five to seven business days. Between the IRS and the Postal Service, you’re going to need to be patient.
A few more payment tips:
- Plan ahead. If you pay by mail, your payment is generally treated as paid as of the date of the postmark. For other payment options, your payment is considered received when actually made (not initialized). Be sure to schedule electronic payments in advance in order to avoid late fees and penalties. And remember that accidents happen – so leave some extra time just in case.
- No matter you choose to pay, do not send cash through the mail. But you knew that already, right?
- And here’s your money saving tip of the day: you do not have to send payment if the amount you owe is under $1 (you’re welcome).