If you owe taxes on your 2018 tax return, the due date to make the payment is Monday, April 15. Miss this deadline by just one day and the IRS will charge you interest and penalties! Don’t risk adding unnecessary dollars to your tax bill. Review the payment options below and make a plan now to ensure your payment arrangements are completed before the deadline.
Options to pay immediately
- IRS direct pay. This free service allows you to pay your balance online using a checking or savings account.
- Electronic Federal Tax Payment System (EFTPS). This free service also allows payment from a checking or savings account, but you can pay online OR by phone.
- Debit or credit card payment. The IRS has three authorized third-party processors to accept payment by debit or credit card, but they charge a fee. Debit card transactions have flat fees that range from $2 to $4. Credit cards are more costly at 2 percent of the entire transaction.
- Check or money order. These payments can be made either in person or through the mail. Make the check or money order payable to the United States Treasury.
- Cash payments. Cash payments are accepted at some IRS offices or participating PayNearMe locations. Do not send cash through the mail!
Options if you can’t pay the full amount
If you are unable to make the full payment, it’s recommended that you pay as much as you can now, and set up a payment plan to handle the remaining balance. If you are in this situation, here are your options:
- Online payment agreement. If you owe $50,000 or less in total taxes, interest and penalties, you can apply online for a payment agreement. Often times, this can be set up in just a few minutes. Setup fees, interest and penalties will be added to your outstanding balance.
- Installment agreement. With an installment agreement, payments can be withheld as a payroll deduction or taken directly from your bank account. Acceptance is less restrictive for installment agreements, so if you aren’t eligible for an online payment agreement, you might still be able to get an installment agreement. Setup fees, interest and penalties still apply.
- Delaying collection. If the IRS determines you are unable to pay, it may temporarily delay collection of the tax debt. A delayed collection does not change the amount due, it simply allows time for your situation to improve before you are required to make the payment. Penalties and interest will continue to accrue until the payment is made in full.
- Offer in compromise. If you meet certain criteria, you may be able to settle your tax bill for less than the amount you owe. The IRS considers your ability to pay, income, expenses and asset equity when determining if you qualify. You can use the pre-qualifier tool to see if you are a candidate.
As always, feel free to pass this Tip along to friends, and reach out if you need help with your personal tax and finance situation.
DiSabatino CPAMichael DiSabatino651 Via Alondra Suite 715Camarillo, CA 93012Phone: 805-389-7300ww.sharpcpa.comThis publication provides summary information regarding the subject matter at time of publishing. Please call with any questions on how this information may impact your situation. This material may not be published, rewritten or redistributed without permission, except as noted here. All rights reserved.