1. Tax bill payments. If
you get a bill from the IRS this summer, you should pay it as soon as
possible to save money. You can pay by check, money order, cashier’s
check or cash. If you cannot pay it all, consider getting a loan to pay
the bill in full. The interest rate for a loan may be less than the
interest and penalties the IRS must charge by law.
2. Electronic Funds Transfer. It’s easy to pay your tax bill by electronic funds transfer. Just visit IRS.gov and use the Electronic Federal Tax Payment System. You may also use EFTPS to pay your taxes by phone at 800-555-4477.
3. Credit or debit card payments.
You can also pay your tax bill with a credit or debit card. Even though
the card company may charge an extra fee for a tax payment, the costs
of using a credit or debit card may be less than the cost of an IRS
payment plan. To pay by credit or debit card, contact one of the processing companies listed at IRS.gov.
4. More time to pay. You
may qualify for a short-term agreement to pay your taxes. This may apply
if you can fully pay your taxes in 120 days or less. You can request it
through the Online Payment Agreement
application at IRS.gov. You may also call the IRS at the number listed
on the last notice you received. If you can’t find the notice, call 800-829-1040 for help. There is generally no set-up fee for a short-term agreement.
5. Installment Agreement.
If you can’t pay in full at one time and can’t get a loan, you may want
to apply for a monthly payment plan. If you owe $50,000 or less, you
can apply using the IRS Online Payment Agreement
application. It’s quick and easy. If approved, IRS will notify you
immediately. You can arrange to make your payments by direct debit. This
type of payment plan helps avoid missed payments and may help avoid a
tax lien that would damage your credit.
Taxpayers may also apply using IRS Form
9465, Installment Agreement Request. If you owe more than $50,000, you
must also complete Form 433F, Collection Information Statement. For
approved payment plans the one-time user fee is $105 for standard and
payroll deduction agreements. The direct debit agreement fee is $52. The
fee is $43 if your income is below a certain level.
6. Offer in Compromise.
The IRS Offer-in-Compromise program allows you to settle your tax debt
for less than the full amount you owe. An OIC may be an option if you
can't fully pay your taxes through an installment agreement or other
payment alternative. The IRS may accept an OIC if the amount offered
represents the most IRS can expect to collect within a reasonable time.
Use the OIC Pre-Qualifier tool to see if you may be eligible before you apply. The tool will also direct you to other options if an OIC is not right for you.
7. Fresh Start. If you’re
struggling to pay your taxes, the IRS Fresh Start initiative may help
you. Fresh Start makes it easier for individual and small business
taxpayers to pay back taxes and avoid tax liens.
8. Check withholding. You
may be able to avoid owing taxes in future years by increasing the taxes
your employer withholds from your pay. To do this, file a revised Form
W-4, Employee’s Withholding Allowance Certificate, with your employer.
The IRS Withholding Calculator tool at IRS.gov can help you fill out a new W-4.
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