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 15^th, 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 15^th. In reality, it must be postmarked by April 15^th. 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.

Daniel Stoica Accounting Professional

When companies outsource their payroll to third parties, it usually makes doing business a little smoother.  However, the IRS wants these businesses to remember that they are responsible for paying federal taxes.

There have been charges brought against individuals and companies who have appropriated funds that were meant for employment taxes, so it’s critical that employers who outsource their payroll are aware of these tips provided by the IRS:

1. Employer Responsibility: It is the employer’s responsibility to deposit and pay federal taxes. Even if they forward the payments to their third-party payroll service to make the deposits, the employer is always responsible for them.
If the payroll service doesn’t make the payments, the IRS will charge the employer with interest and penalties. The IRS can hold the employer accountable for other unpaid federal taxes.

2. Correspondence: If there happen to be account issues, be assured that the IRS will send a notice to the payroll service’s address. It is recommended that employers do not change the address on record with the IRS without notifying them, this way the employer, and the payroll service, doesn’t miss important information.

3. EFTPS: It’s a good idea to use a payroll service that uses the Electronic Federal Tax Payment System. To get their own PIN to verify payments, the payroll service can register on the EFTPS system.

There is more information about employer responsibility regarding federal tax payments with outsourced payroll service providers on irs.gov. Also, you may want to check with a qualified tax and/or payroll professional if you have questions.

Daniel Stoica Accounting Professional