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Heres How to Pay If You Owe Money to the IRS - Jul 2020

Money
Contributed by : Mukesh Makker
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The federal tax deadline is quickly approaching. If you owe money to the IRS - including estimated and other business taxes - here are six options for quick and easy electronic payments:

Taxpayers who owe a 2019 income tax liability, as well as estimated tax for 2020, must make two separate payments on or by July 15, 2020 - one for their 2019 income tax liability and one for their 2020 estimated tax payments. The two estimated tax payments (originally due April 15 and June 15), however, can be combined into a single payment.

1.Electronic Funds Withdrawal (EFW). This option allows taxpayers to file and pay electronically from their bank account when using tax preparation software or a tax professional. EFW is free and only available when electronically filing a tax return.

2.Direct Pay. Direct Pay is free and allows taxpayers to securely pay their federal taxes directly from their checking or savings account without any fees or preregistration. Taxpayers can schedule payments up to 30 days in advance. After submitting a payment through Direct Pay, taxpayers will receive immediate confirmation. They can opt-in to receive email notifications about their payments each time they use Direct Pay.

3.Credit, Debit Card or digital wallet. Pay online, by phone, or with a mobile device through any of the authorized payment processors. The processor charges a fee. The IRS doesn't receive any fees for these payments. Go to IRS.gov/payments for authorized card processors and phone numbers.

4.IRS2Go. The IRS2Go mobile app is free and offers taxpayers the option to make a payment with Direct Pay for free, or by debit, credit card, or digital wallet through an approved payment processor for a fee. Download IRS2Go free from Google Play, the Apple App Store or the Amazon App Store.

5.Electronic Federal Tax Payment System. This free service gives taxpayers a safe and convenient way to pay individual and business taxes by phone or online. To enroll and for more information, call 800-555-4477 or visit eftps.gov. Both business and individual taxpayers can opt-in to receive email notifications about their payments.

6.Cash. Taxpayers paying with cash can use the PayNearMe option. Payments are limited to $1,000 per day, and a $3.99 fee applies to each payment. Taxpayers choosing this option should start earlier rather than later because PayNearMe involves a four-step process. Initiating a payment well ahead of the tax deadline will help taxpayers avoid interest and penalty charges. The IRS offers this option in cooperation with OfficialPayments and participating retail stores. Details, including answers to frequently asked questions, are at IRS.gov/paywithcash.

As a reminder, taxpayers must file their 2019 tax returns by July 15, 2020, or request a three-month extension to October 15, 2020. Any taxes owed, however, are still due on July 15 and even if they can't pay, taxpayers should still file an extension to avoid the higher penalties for not filing at all.


About Author
Mr. Maker is a certified Public Accountant and serving the South Asian community since 1993.

Website: https://www.taxmaker.com/newsletter.php#4

 

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