What is the best way to pay back taxes?
The IRS offers multiple ways for you to pay off your taxes so choosing which suits you the most is important.
Despite the end of the tax season for this year passing, having a good grasp of how to properly pay tax is pretty important. You may be part of the group that has an extension to your tax returns and making sure you know the best way to pay your taxes will definitely come in handy.
If you do have an extension bear in mind that while this extends the filing date substantially, any tax payments you are required to pay will still be due on the original date.
Here are five ways that you can use to pay your taxes.
Electronic Funds Withdrawal
Electronic Funds Withdrawal (EFW) is an integrated e-file/e-pay option offered only when filing your federal taxes using tax preparation software or through a tax professional.
Direct Pay With Bank Account
Use this secure service to pay your taxes for Form 1040 series, estimated taxes or other associated forms directly from your checking or savings account at no cost to you.
However, this service is only available during these hours
Debit or Credit Card when you e-file
The integrated e-file and e-pay debit/credit card option is available through a number of tax preparation software products and tax professionals. Here is the list of integrated IRS e-file and e-pay service providers:
Be warned, both companies have a rate of over 2.35 per cent and also charge a minimum $3.95 convenience fee.
Cash at a Retail Partner
It is possible to pay your taxes in person with an IRS affiliated store. To do so, visit the ACI Payments, Inc. site and follow the instructions to make a cash payment.
Agreement to pay by installment
A payment plan is an agreement with the IRS to pay the taxes you owe within an extended timeframe. You should request a payment plan if you believe you will be able to pay your taxes in full within the extended time frame.
However, this method of paying your taxes will accrue interest, so it is better to pay what you owe in tax on time and throught the myriad digital routes.
There is more information here of what the IRS can offer as well as fees that come with paying by installment.