How to Pay Your Federal Taxes to the IRS

Taxpayers have an obligation to pay any federal taxes they owe by the annual filing deadline. The Internal Revenue Service (IRS) provides several secure and reliable methods for making these payments. Understanding the available options ensures that the payment process is handled correctly and on time, whether the payment is with a tax return or for another reason.

Information Required for Payment

Before initiating any type of tax payment, specific information must be gathered to ensure the funds are correctly applied to your account. The primary identifier is your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). This number links the payment directly to your tax profile, and without it, the IRS cannot properly credit your account.

You must also identify the reason for the payment. This could be a balance due on a recently filed Form 1040, an estimated tax payment, or a payment in response to a specific IRS notice. Clearly identifying the tax year for which the payment is being made is also necessary to prevent misapplication.

Finally, you need the exact payment amount. Double-checking this figure against your tax return or the IRS notice is important for accuracy. Having these details ready will streamline the payment process.

Electronic Payment Methods

The IRS offers several electronic payment methods, which are the fastest and most secure ways to pay.

• IRS Direct Pay is a free service available on the IRS website. After verifying your identity with information from a previously filed tax return, you provide your bank account and routing numbers for a direct debit from your checking or savings account.
• A debit card, credit card, or digital wallet can also be used. These payments are processed through third-party companies that partner with the IRS. You can access these processors from the IRS website, but they charge a fee for their service, which varies depending on the card brand and payment amount.
• The Electronic Federal Tax Payment System (EFTPS) is an option for those who make regular federal tax payments, such as quarterly estimated taxes. This free U.S. Department of the Treasury service requires enrollment to receive a Personal Identification Number (PIN) by mail. Once enrolled, you can schedule payments up to 365 days in advance.
• An electronic funds withdrawal can be used when you file your taxes electronically with tax preparation software or a tax professional. This method integrates the payment directly into the e-filing process, and the payment is automatically debited from your account on a date you specify.
• The official IRS2Go mobile app provides a convenient way to make payments from a smartphone or tablet. The app offers access to both IRS Direct Pay for free bank transfers and the third-party processors for card payments.

Traditional Payment Methods

For taxpayers who prefer not to pay online, traditional methods remain available. The most common of these is paying by check or money order, which must be made payable to the “U.S. Treasury.” On the memo line, include the same identifying information gathered earlier, such as your SSN and the tax year, along with a daytime phone number.

When mailing a payment, it is highly recommended to include Form 1040-V, Payment Voucher. This form is not required but helps ensure your payment is processed accurately. You can download Form 1040-V from the IRS website and mail it with your payment to the address specified in the form’s instructions.

Paying with cash is a less common but available option. You cannot mail cash directly to the IRS. Instead, you must use one of the IRS’s retail partners. The process begins on the IRS website, where you generate a payment code to take to a participating retail store to complete the transaction.

Handling Inability to Pay in Full

If you cannot pay your full tax liability by the deadline, the IRS provides several options to help manage the debt. It is important to still file your tax return on time to avoid failure-to-file penalties.

One of the most accessible options is a short-term payment plan, which can grant you up to 180 additional days to pay the full balance. This is available provided your total liability is under $100,000 in combined tax, penalties, and interest. This plan can often be requested online, though interest and penalties will continue to accrue on the unpaid amount.

For those who need more time, an installment agreement may be a suitable solution. This is a formal plan to make monthly payments over a longer period, often up to 72 months. Taxpayers who owe a combined total of less than $50,000 in tax, penalties, and interest can typically apply for an installment agreement online.

In cases of significant financial hardship, an Offer in Compromise (OIC) may be an option. An OIC is an agreement with the IRS to settle your tax debt for a lower amount than what you originally owed. To qualify, you must demonstrate that paying the full amount would create a severe financial strain, and the IRS evaluates your ability to pay, income, expenses, and asset equity.