Step 2: Verify Your IdentityĪfter confirming your previous selections, you’ll select a tax year for verification. You can also use the Direct Pay system for reasons such as to make an estimated payment, pay the balance due with an amended return, or make a payment on an installment plan. Under “Apply Payment To,” select “1040,” and under “Tax Period for Payment,” select “2020.” For example, to pay the balance due for a 2020 income tax return, you’ll select the “Tax Return or Notice” option from the “Reason for Payment” drop-down box. This includes the payment type, applicable form number, and tax period.
There are five steps to this process: Step 1: Provide Your Tax Information If you don’t e-file or choose not to have your payment direct-debited, another secure (and free) option is IRS Direct Pay. You’ll owe interest on the outstanding balance as well. Do what you can to pay on time, as the late payment penalty is 5% of your unpaid taxes per month, which can build up to as much as 25% of your unpaid taxes.
No matter when you make the payment, your best bet is to pay the balance due in full to avoid the penalties and interest the IRS assesses on late payments.Īnd remember, even if you request an extension, it’s only an extension of time to file your return, not an extension of time to pay the tax you owe. However, to manage your cash flow, you can specify an earlier date when you’d like the payment siphoned from your account. In most tax software, the default payment date is the due date of the return – typically April 15. Instead, you’re doing an Electronic Funds Withdrawal (EFW) transfer from your little pot of gold to the IRS coffers. A check number usually follows the account number you don’t need that because you’re not using an actual check. The nine-digit routing number is first, followed by your account number. These numbers appear at the bottom of your checks.
Even some of the free tax software options take care of this for you.Īll you need is your bank’s routing number and your account number. Most of the best online tax preparation software like H&R Block has this option. Direct Debitĭirect debit to your checking or savings account is one of the fastest ways to satisfy a tax debt. Be sure to choose a payment method that allows enough time for the IRS to receive your payment before the deadline to avoid late payment penalties and interest. The IRS offers several free or low-cost options to pay the amount you owe. If you’re wondering how best to pay your taxes this year, here are the options available to you. The good news is that, as intimidating as the IRS might seem, its employees try to make paying any taxes due easy. If you normally get a refund, you might be financially unprepared for an unexpected tax bill. As a result, you owe Uncle Sam this year. You’ve assembled and organized all of your tax documents to meet the April 15 tax filing deadline, and you’ve discovered that, unfortunately, you didn’t have enough tax withheld or make enough estimated tax payments.