If you’re one of the millions of taxpayers who owe money to the IRS this tax year, you need to make sure you’re taking steps to pay off that liability without any penalties and extra charges.
Failing to file your taxes on time or failing to request an extension to file before the due date will result in late-filing penalties.
If you owe much more than you can afford right now, you will need to set up a payment plan that minimizes interest charges.
Here are ten important things to keep in mind when paying your taxes to the IRS:
#1: Don’t send cash.
The IRS will only accept a check, credit card, or ACH payment for your 2012 taxes. Don’t make the mistake of sending cash.
#2: Take advantage of e-filing options.
Filing electronically will allow you to file and pay your tax liability in a single step. All you have to do is authorize a withdrawal from a specified account through your tax preparation software program, or when working with a tax professional.
#3: Use the e-File Electronic Payments option.
You can make your payment online 24 hours a day, seven days a week using the IRS’s very own e-File Electronic Payment system. Refer to Publication 3611 for more information.
#4: Consider using a debit or credit card.
You do have the option of paying your taxes with a credit card or a debit card. If you choose to pay with a credit card, just make sure you’re choosing a low-interest credit card and making room in your budget to pay off the debt.
#5: Include Form 1040-V, Payment Voucher, with your payment.
If you decide to mail in your payment to the IRS, don’t forget to include this payment voucher. Double-check the address so the IRS can process the payment as efficiently as possible.
#6: Don’t staple the check to the form.
If you decide to pay by check, don’t staple the check to any documents. Just slip the check inside the envelope.
#7: Deduct convenience fees.
If you are itemizing your tax return, you may be able to deduct any convenience charges for paying with a credit or debit card. You will need to use Form 1040, Schedule A, Itemized Deductions to report this deduction in the ‘miscellaneous’ category.
#8: Make checks payable to the right entity.
All checks must be made payable to the ‘United States Treasury’ – not the Internal Revenue Service or the IRS.
#9: Pay by phone.
Even if you filed electronically or mailed your tax return, you can choose make your payment by phone using a credit card or debit card.
#10: Double check your return for accuracy.
Make sure you’re providing the correct name, address, Social Security number, and other key details on the tax return. You will also need to make sure this contact information is included somewhere on the front of your check or money order.
If you are paying by check or money order, make sure to also include your daytime telephone number, the tax year for the payment, and the form number.
