With the April 15th filing deadline quickly approaching some people are undoubtedly reaching a state of panic. You have finished your return and there is balance due to the IRS. Worse, you do not have the money. Now what?! Do you hold onto the return and not file? No. This is the worst thing you could do. By doing this you not only incur interest and penalty for not paying on time, but also get some late filing penalties added to the mix. No, go ahead and file. Include payment for as much as you can and include a note explaing how you plan to pay the balance. There are also alternative payment options to consider. Based on your circumstances, you may be granted a short additional time to pay your tax in full. The IRS is sometimes able to allow a brief additional amount of time to pay in order to facilitate tax debt repayment.
A brief additional amount of time to pay can be requested through the Online Payment Agreement application at IRS.gov or by calling 800-829-1040. Taxpayers who request and are granted an additional 30 to 120 days to pay the tax in full generally will pay less in penalties and interest than if the debt were repaid through an installment agreement over a greater period of time. Please note, however, that you will pay penalty and interest on late tax payments regardless of how you arrange payment. If you need more than 120 days to pay the balance, you can apply for an IRS installment agreement using our Web-based OPA application on IRS.gov. This Web-based application allows taxpayers who owe $25,000 or less in combined tax, penalties and interest to self-qualify, apply for, and receive immediate notification of approval. You can also request an installment agreement before your current tax liabilities are actually assessed by using OPA. The OPA option provides you with a simple and convenient way to establish an installment agreement and eliminates the need for personal interaction with IRS and reduces paper processing. You can charge your taxes on your American Express, MasterCard, Visa or Discover credit cards. Additionally, you can pay by using your debit card. However, the debit card must be a Visa Consumer Debit Card, or a NYCE, Pulse or Star Debit Card. To pay by credit card or debit card, contact one of the service providers at its telephone number or Web site listed below and follow the instructions. There is no IRS fee for credit or debit card payments, but the processing companies charge a convenience fee or flat fee. If you are paying by credit card, the service providers charge a convenience fee based on the amount you are paying. If you are paying by debit card the service providers charge a flat fee of $3.95. Be sure you don’t add the convenience fee or flat fee to your tax payment. The web site will add it for you.
All in all, if you have the credit available on a credit card go for it. The interest you pay there will almost certainly be less than the combined penalty and interest you’ll pay to the IRS.
Some of the links you might need are:
To pay by debit or credit card: 888-PAY-1040 (888-729-1040), www.pay1040.com
To pay by credit card: 800-2PAY-TAX (800-272-9829), www.officialpayments.com
To pay by debit card: 800-866-4PAY-TAX (866-472-9829), www.officialpayment.com/debit
