Tax Payment Options
If you find yourself owing taxes this year, it is important to pay by the April 15 deadline to avoid interest and penalties. In addition to sending a check, there are other ways to pay, including your credit or debit card. It is safe, secure and convenient.
There’s more than one way to pay your taxes.
From plastic to direct debits to installment plans, there are a variety of ways to pay the IRS should you owe tax this year.
Credit cards and debit cards are fast and convenient. Payment confirmation is instant.
E-file your return and the IRS can debit your tax due directly from your checking or savings account on any date you request on or before April 15.
Make affordable monthly payments by filing an installment agreement with the IRS. You can apply for installment agreement using the Online Payment Agreement.
Credit Cards and Debit Cards
When you have your taxes prepared by H&R Block, you can pay your federal tax due at a participating H&R Block office with any MasterCard®, Visa®, American Express® or Discover® credit or debit card with low convenience fees12. The convenience fee for paying your federal tax amount with a debit card is low fixed fee of only $2.69 per transaction.
Taxes can be paid immediately, while you're still in the H&R Block office. There's no need to write a check, travel to the post office and pay for certified mail or worry about late fees or penalties resulting from a lost or delayed check. You can also earn rewards and, with credit cards, pay your taxes over time.
If you have already filed your tax return return (Form 1040 and many other form types) and want to pay your tax due, visit the tax payment site.
The IRS enables taxpayers with SSN's (no ITIN's) an additional method to pay series 1040 taxes directly from their savings or checking account. No prior enrollment is required, but taxpayer identity is verified from information on the prior year tax return. There is no fee for this service – see IRS Direct Pay for more information.
Personal Check or Money Order
This is the traditional method of paying when mailing a paper return. Be sure to write 2015 Form 1040, your daytime phone number and your social security number in the memo field and make your check payable to the United States Treasury. Include a payment voucher with your payment. Information about where to make payment can be found at the IRS website, Where to File.
The IRS may permit you to pay in installments if you cannot pay in full on the due date. This method of payment has to be approved by the IRS. Following approval, the IRS agrees to let you make monthly payments for your debt instead of payment in full. In return, you agree to make timely monthly payments and pay all future tax liabilities. This means you must plan to have adequate future withholding or estimated tax payments so that future tax liabilities are paid in full when you file your returns. If your balance due is not more than $50,000, you can apply online for a payment agreement instead of filing Form 9465. The IRS virtually guarantees to let you use an installment agreement if you meet the following conditions:
- The amount you owe does not exceed $10,000.
- You've filed all required returns on time and have not had an installment plan in the past 5 years.
- The IRS determines you cannot pay the tax in full when it's due and you furnish the IRS with all the information needed to make this determination.
- You agree to pay the bill within 3 years and comply with the tax laws while the agreement is in effect.
Interest, late payment penalties and a processing fee apply. Fees for setting up an installment agreement:
- $52 for a direct debit agreement;
- $120 for a standard agreement or payroll deduction agreement; or
- $43 if your income is below a certain level.
You may qualify for a short term agreement if your balance is $100,000 or less. There are no set up fees for those who qualify for a short term agreement (120 days or less).
Applying for an installment agreement:
- Apply online if you owe $50,000 or less in combined individual income tax, penalties and interest;
- Call the phone number on your bill or notice;
- Complete and mail Form 9465, Installment Agreement Request (PDF). If you owe more than $50,000, you will also need to complete Form 433-F, Collection Information Statement (PDF).
To limit the amount of penalties and interest, pay as much of your tax bill as possible with your return. The IRS recommends considering other less costly alternatives, such as a bank loan, before considering an installment agreement. When you apply online, 3 payment options are available:
- pay in full
- short-term extension (If you can pay the full amount you owe within 120 days, call 1-800-829-1040 to establish your request to pay in full. If you can do this, you can avoid paying the fee to set up an installment agreement.)
- monthly payment plan
Choosing a Payment Method
When considering which payment method best suits your situation, remember to carefully consider the interest rates and other costs of the payment options. Interest and penalties do not stop with an installment agreement/payment plan. You can save money by paying the full amount you owe, as quickly as possible; to minimize the interest and penalties you will be charged. Under an IRS installment agreement, in addition to the processing fees, you are charged interest at the current rate (adjusted quarterly) plus a late penalty of 0.5% (0.25% for taxpayers who filed returns on time).
For more information about IRS payment options, visit IRS payments. If you know you'll have a balance due this year, it pays to know your options. It will save you money, worries and penalties.