5 Ways To Pay Your Federal Taxes To The IRS
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Hello from FredoomTax Accounting. We’re an accounting firm where we have been providing quality tax and accounting services now for over 20 years. We’re pretty excited about this video because I know that this is everyone’s favorite topic. How can I pay my taxes? So, I’m pretty sure you are excited, as well as we are. In this video, we’re going to show you 5 different ways that you can pay your taxes to the IRS.
If you owe taxes to the IRS, you have more than one way of making your federal tax payment to the IRS. In this video, we’re going to discuss 5 of them, and at the end of the video we’re going to give you a bonus way, so we’re actually going to show you 6 ways on how to pay your taxes.
Remember that paying taxes is unfortunately not optional. You must make payments of your IRS federal tax liabilities to the IRS. Remember that you need to make your first federal tax payment by the due date now. Usually, every year the due date is April 15th, that may change year to year.
For example, there are years that April 15th is on a holiday, so the IRS usually extends the deadline by the next business day or, for example, when COVID hit, that there was a disaster and all these other things that due date was moved forward to give more people time to pay their taxes, but usually tax date is April 15th.
Even if you submit an extension, you must make a payment if you file an extension. Why? Remember that there are two penalties with the IRS, there’s a failure to file penalty, and there’s a failure to pay penalty.
Now, if you file an extension that gives you 6 more months to file your taxes and you won’t get the penalty for filing late. But, even if you file an extension, the extension does not cover the failure to pay penalty. So, if you know that you’re going to owe taxes, that you have a tax liability, then we suggest that you send the extension with a payment, right? If you still don’t know how much you owe, then send as much as you can or estimated payment. That way you don’t get hit with the failure to pay penalty.
To make payments to the IRS, there are several different ways. You can go to this website, www.irs.gov/payments. If you go to that IRS website, it gives you different ways you can make payments towards your federal tax liability, and we are going to discuss five of them, actually six of them, in this video.
The most common one is to e-file/e-pay your taxes. If you’re doing your taxes with a tax software or if you’re using a CPA or another tax professional, usually you pay your taxes using electronic funds withdrawal. This has several advantages. First advantage is free. The other advantage is that the IRS just takes the money out of your account and it’s very simple. You just tell your software, or you tell your CPA “I want the IRS to take the payment from my account this date”. So that’s usually what happens if you use tax software, or you use a tax professional.
The 2nd way is that you can actually pay the IRS online. You can pay your tax balance, you can pay estimated taxes, you can make the payment for the extension. You can view your payment history and your balance; if you have a do balance with the IRS, you can check it out using your online IRS account. You can also schedule future tax payments. So, for example, you can set up your online account with the IRS. Here, see signing to your online account, you can create your account with the IRS, and here you can access your tax records and make sure that you’re making your payments. You can view your balance; you can create payment plans. So, this is a very good option, and we suggest that everyone create an account with the IRS, so you have all the information directly from the IRS website.
The 3rd way is that you can do IRS direct pay. So, you can pay electronically from a checking or a savings account. This is good because you can schedule payments up to a year in advance, and you can choose to get email notifications. Now, this is very important because we always tell our clients the IRS will not send you emails. Usually if you get an email saying it’s from the IRS that you need to make a payment, it is usually a scam. But if you use the IRS direct pay with a bank account, you basically go to this website on the IRS, and you click make a payment, and you can choose to get email notifications, this way.
The 4th way is to use a payment processor, this option you can pay your taxes with a credit card, a debit card, or a digital wallet like PayPal. You can pay online or through a phone call. So you go to this website, pay your taxes with a debit or credit card or digital wallet. You basically search up in Google “Pay taxes to the IRS with credit card” and you’re going to get this page. We are going to provide links to all these pages under description of this video. Here you can choose your payment processor. Here you see that they do charge a fee, so you choose one of these processors and you can make your payment with a credit card or a debit card or a digital wallet like PayPal.
The 5th way you can pay your taxes is to pay your taxes in cash. You can pay cash in several different ways, you can go to more than 60,000 retail locations, which I’m going to show you how to find them, you can mail via money order or a cashier’s check, never send cash via mail to the IRS; or you can make a cash payment in person at any of the IRS taxpayer assistance centers. So, if you want to pay cash and you to pay in a retail center, you go here where it says retail partners and there’s a map, where it says a map, and here you put your zip code, and is going to search all the available retail locations that you can make your payments in cash to the IRS. So, it’s very simple to use.
The bonus way is that basically you can pay your taxes through your phone. The IRS does have a mobile app called IRS2GO, and here you can check your account, you can check your balances, you can make a payment with a credit card or a debit card, you can pay using a checking account. So, this is another convenient way where you can pay your taxes to the IRS. You can download the IRS2GO up and you just create an account, and you can make your payments through your phone.
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