Everywhere you look, there are ads for tax services promising maximum refunds. However, not everyone gets a refund. Some taxpayers experience circumstances they had not planned for and end up owing unexpectedly (which is why you should call us any time you encounter a new situation that can impact your taxes). Some taxpayers simply understand that a tax refund is the equivalent of making an interest-free loan to the government and carefully plan to owe a manageable amount each year. Whatever the reason for owing, the IRS has made several payment methods available so taxpayers can pick the one that fits them best.
The method most often used is to send a check to the IRS along with the 1040V payment voucher that was provided when the return was prepared. You have until the filing deadline (this year, April 17th) to mail this. Your voucher should have come with instructions about information that should be included on your check and the proper mailing address to use. Some clients wait to file their return because they know they will owe. E-filing the return in advance of mailing the check is perfectly fine; there is no need to wait until the last minute to file. Filing early gives you time to make sure you have all necessary documents (see our tax document checklist) and avoid the last-minute rush. Another option available is setting up an automatic debit from the taxpayer’s bank account at the time of filing the return; taxpayers choosing this can specify the date on which the IRS will take the payment directly from their account. There is no charge associated with either of these payment methods.
Taxpayers may also choose to pay through the IRS’s website. To use this method, go to the IRS payment page and click on “Direct Pay.” You will be asked some questions to verify your identity. These questions will be based on information from a previously filed tax return so you may find it useful to have last year’s return handy. Using this site, you can set up a direct debit from your bank account on the date of your choice. There is no charge to use this feature.
Those who prefer to pay with plastic also have choices. On the IRS’s payment page, click “Debit or Credit.” You will need to choose one of the three approved payment processors. Please note that there is a fee for using credit or debit cards; each processor discloses their fees on the payment page so you can pick the one that is best for you. Once you select a processor, you’ll need to have the Social Security number of the taxpayer (and spouse, if applicable) to make sure the payment is applied correctly.
Depending on your circumstances, there may be additional ways to pay (wire transfer, cash) but these involve IRS partner sites, incur fees, and make take several days for transactions to be completed. We suggest using one of the easier and cheaper methods listed above to pay any tax owed. Most states have payment options that are similar to IRS procedures. An additional option for those owing North Carolina is to pay in person at a local NC Department of Revenue office.
While the IRS has made it easy to pay tax amounts due, if you encounter any problems or need our assistance to ensure your payment is being sent correctly give us a call. In our next blog post we will discuss what to do if you cannot pay your full tax bill by the deadline. Avoid unpleasant situations like that in the future by letting us help you with tax planning now. New tax laws and new withholding tables may mean a vastly different bottom line for you next year, and we’re here to help you navigate all the changes. And if you've put off filing your taxes because you don't think you're getting a refund, know that we work hard to minimize how much you owe. Contact us today!
