By A.J. Gross, C.P.A., E.A.
If you filed for an automatic 6 month extension then tax season is officially over as of October 15, 2014. The IRS doesn’t allow any additional extensions. There are numerous reasons why a decision was made to request more time to file a tax return. One reason is you needed more time to pay the taxes. The following are some tips for paying your tax bill.
You can pay your tax bill by mail. The check should be made payable to the U.S. Treasury. On the memo line of the check, write your social security number and the words “2013 Form 1040.” It’s important to write the correct information on the check. The IRS may not apply your payment correctly if you leave the memo line of your check blank. For Michigan residents, the check should be mailed to Internal Revenue Service, P.O. Box 802501, Cincinnati, OH 45280-2501.
You can pay directly from your checking or savings bank account. The IRS calls this service Direct Pay. Direct Pay is a free service offered by the IRS. Go towww.irs.gov/Payments/Direct-Pay.
You can pay by credit or debit card. This requires the use of a payment processor. You provide the payment processor your card information and your IRS tax bill is paid. There are fees charged for using this service. Go to www.irs.gov/uac/Pay-Taxes-by-Credit-or-Debit-Card for a list of payment processors.
You can pay your tax bill by using the Electronic Federal Tax Payment System (EFTPS). EFTPS is a free service offered by the U.S. Department of Treasury. Go to www.eftps.gov/eftps/. Unlike other electronic payment methods, you must enroll for EFTPS before you are allowed to use it. It may take up to 5 to 7 days to get fully enrolled.
If you’re unable to pay your tax bill in full, you can request a payment plan. A payment plan may be set up online for tax balances less than $50,000. Go towww.irs.gov/Individuals/Online-Payment-Agreement-Application. There are times when the online IRS payment plan system doesn’t work. This could be due to a variety of reasons. For more information on payment plans go to www.algtaxsolutions.com/tax-help/individual-irs-installment-agreement/.
Finally, if you simply don’t have the money to pay the taxes in full, you may consider an Offer in Compromise (OIC). You could potentially pay less than you owe with the IRS OIC program. For more information on the IRS OIC program go to www.algtaxsolutions.com/tax-help/irs-settlement/.
A.J. Gross, C.P.A., E.A. is President of ALG Tax Solutions. A.J. Gross can be contacted at AJGross@algtaxsolutions.com.
This was printed in the October 19, 2014 - November 1, 2014 edition.