Owing the IRS and Understanding Your Payment Options
So you owe the IRS taxes and now you wonder what your options for paying are. For paying can you send in a check? Can you pay online? Does the IRS accept cash? Can you use Paypal? Below are your payment options when it comes to owing Uncle Sam.
1) Online Debit or Credit Card – You can pay online at www.irs.gov/payments by choosing one of three different payment processors. Fees will be charged by the processor. You can pay current years 1040 taxes, prior years 1040 taxes, installment agreement payments, 1040 estimates or trust fund payments.
2) Online Direct Bank Debit – You can also choose to have the IRS electronically withdraw from your bank account. There are no fees for this method, and it can be done at www.irs.gov/payments .
3) EFTPS – Electronic Federal Tax Payment System payments can be scheduled online or by phone in advance for business or personal taxes for current or prior years. You can learn more at https://www.eftps.gov/eftps/ .
4) Electronic Funds Withdrawal- Payments can be scheduled to withdraw from your bank account during the efiling process. This option requires advance registration and a PIN number.
5) Check or Money Order – Yes, believe it or not you can send a check or Money Order and no fees will be charged!
6) Same Day Wire – Bank will charge fees.
7) Cash – 7 eleven stores are now accepting cash payments up to $ 1,000, but fees will be charged. You can learn more at https://www.irs.gov/payments/pay-with-cash-at-a-retail-partner.
What if I owe back taxes and can’t pay them in full what are my payment options then?
Installment Agreement – Several options are available if you want an installment agreement. If you owe under $10,000 to the IRS you can request an installment payment agreement, and it is guaranteed to be accepted. If you owe over $10,000 but under $50,000 you can request an installment payment agreement up to 72 months, and no financial information is required to be provided. If you owe over $50,000 but under $100,000 you can request an installment agreement up to 84 months, and very limited financial information is required.
Offer In Compromise – You may qualify to settle your tax debts for less if you can prove that you will never be able to fully payoff the IRS within the remaining collection statute. Financial information is required along with a 20% down payment.
Financial Hardship Temporary Delay – If you are unable to make payments you might qualify for temporary delay on collections. Financial information statement is most likely required to prove this.
If you think you may qualify for any of the above or would like to discuss your options please feel free to call my office at 855-TAX-FIXX (855-829-3499) and schedule a no charge consultation.