Ways of sending payment plan to the IRS

The time limit for US residents to file their annual tax returns with the IRS has been postponed to July 15 in 202 , and the tax payment due date has been pushed back along with it. Both movements are part of the US government’s response to COVID-19, the new Coronavirus that scans the country. 

You can pay the IRS in different ways when the time comes in person, at various online payment centers or by sending a check or good order, the old way.

Considerations in 2020

Some taxpayers may find that they cannot even make the extended July 15 or payment dates due to the effects of COVID-19. You can typically have an extension by filing form 4868 with the IRS instead of a return, giving yourself another six months, until October 15th.

Technically, any payment you should will still be due by 15 July. You are more or less supposed to wing it and send the IRS an estimate of what you think you will still owe if you ask for and receive an extension of time to file your feedback. You must submit your tax payment along with your request for an extension. You will receive a refund if you send too much or you owe the IRS more when you actually file your return if you complete it only to realize that you have underpaid.

You can ask the IRS to work with you and set up a payment plan if you have trouble paying the full amount of tax that you owe.

Online payment using Direct Pay

You can set up an electronic funds transfer from your checking or savings account through the Direct Pay on the IRS website if you have the money on hand to pay what you owe. You can also access Direct Pay on the IRS2Go mobile app. It is the official IRS application, accessible through the Amazon App Store, the Apple App Store or on Google Play.

The IRS does not charge a processing fee for this option. You can plan payments up to 30 days in progress, and you can also stop or change them up to two business days before you have planned a term payment.

The only disadvantage is that you must re-enter your personal, identifying information every time you use Direct Pay, which can be a bit of a nuisance. The system does not keep it for you, and you cannot set up an account here. But it gets the job done relatively rapidly and efficiently. 

Direct Pay handles several types of payments related to Form 1040, like balance payments, estimated payments, and extension payments. It accepts some other less common types of payment as well. 

You will receive instant email confirmation of your payments for your records, if you ask. 

 

Online payment by debit or credit card

You can also pay by credit or debit card, but you must make use of one of the payment processors that is accepted by the IRS. Three processors are available from the 2020 calendar year and you can make use of any of them on the IRS website or via the IRS2Go Mobile app:

·  PayUSATax.com

·  Pay1040.com

·  OfficialPayments.com/fed

They all charge a processing fee that may differs, but this fee may be tax deductible, depending on your tax status. It is generally a flat fee for a debit card transaction, or a small percentage of your payment if you are using a credit card. Your credit card company may charge you interest also.  

You can always make a check payable to the United States Treasury, if you prefer preventing the internet and you want to make the payment of the good, old way. Be sure to write your Social Security number, tax form number, and tax year in the memo field of your paper check. 

You can also send money orders in this way. 

Send the check together with Form 1040-V, which is proof of payment, but do not staple or clip the check to the voucher. Send it to the appropriate address indicated on page two of Form 1040-V, or you can find the correct address for the nature of your payment and your state of residence on the IRS website. Different addresses depending on your state of residence and may change from time to time, so be sure to access them from the 2019 form or directly on the website.

If you really want to go old school and a lot of people do, because they are concerned about hackers and fraud scams, you can pay up to your local IRS official. Make an appointment online before going to the office, so you don’t have to wait a large amount of time, or worse, come back another day. These offices can get full of activity.  

Taxpayer Assistance Centers are closed from March 2020 and until further notice due to the corona virus pandemic, so this will not be an option at the beginning of the year.

A similar option is to visit an “IRS retail partner“, one of more than 7,000 participating retail stores across the country that will forward your payment to the IRS for you. OfficialPayments.com/fed provides a list of these stores. Just click on “Pay Near Me” under the “Extras” tab.

Do not try this option if your payment is due tomorrow as it can take stores five to seven business days to process payments. Both options permit you to pay cash. You can also pay by check or money order. 

 

Set up an Electronic Withdrawal Funds

You can normally set up a direct debit from your checking account if you use   e-file tax preparation software for your return, either on your own or through a tax expert. Generally, it is just a simple case of entering your bank account information into your software program, but this option is unavailable for taxpayers other than E-file.

 

Ask your bank about a Wire service

Banks are capable of setting up bank transfers on the same day to pay to the IRS, although they generally do not advertise it. Fees for this service can vary from insignificant to significant depending on the size of the payment.

Avoid Owing in the Future

Adjust your retention so more tax is removed from each payment of salary or pension. Your employer or plan administrator will take care of the dirty work for you, sending your money to the IRS on your behalf. You are left with the use of one of these options to mandate, however, if you are an independent contractor or otherwise exempt from withholding tax you must make estimated tax payment plan.