Posted by : Daniel Stoica in (Blog, Business Tax, Federal Tax Return, Federal Taxes, Income Tax Forms, Income Tax Return, Income Taxes, Tax Tips) On: September 30th, 2011
Tagged Under : accounting professional, check, credit card, Daniel Stoica, Direct Deposit, EFTPS, IRS, Self-employed, tax professional, taxes
Taxes are generally held by employers and sent to the IRS as payroll taxes. For the self-employed, you have to make installment payments every quarter based on your estimated taxes. All taxpayers have to file a tax return by April 15th, unless they file an extension. If they paid too little in taxes throughout the year, they will owe the IRS the balance at tax time and will have to pay those taxes when they file their taxes. If your payment is late, you will have to pay penalties and interest on what you owe. If you can’t afford to pay what you owe, you need to contact the IRS before they are due and make arrangements to make payments.
There are several ways you can arrange payment options with the IRS. Here are four options to pay your tax bill:
1. Mail a Check
Many taxpayers still send their tax payments by this method. You check must be sent before April 15th. In reality, it must be postmarked by April 15th. Your tax booklet will tell you where to send your check, or you can check the IRS website for the address in your region. The IRS recommends priority mail via U.S.P.S.
2. Use Your Credit Card/Debit Card
You can use your credit card to pay your taxes, however, it may end up costing you more in the long run with the interest rates your credit card company may charge. If you decide to go this route, you should know that the IRS has partnered with three companies that provide credit card services to help taxpayers make payments. The IRS website provides information about these companies.
3. Direct Deposit
You also have the option of agreeing to a direct deposit. This allows the IRS to take the taxes you owe from your bank account. This service is easy and free. If you are expecting a refund, choosing direct deposit could also get your refund to you much more quickly than if your refund check is mailed to you.
4. Electronic Federal Tax Payment System (EFTPS)
You may also use the EFTPS service when paying the taxes you owe. The IRS offers this service by allowing taxpayers to make regularly scheduled payments. It’s a free service and all individual taxpayers may use it. You can enroll for this service at www.irs.gov.