Info about Electronic Tax Payment
The Convenience of an Electronic Tax Payment
The Internal Revenue Service has several ways to help tax payers meet their obligations. There are plans available for those tax payers who cannot pay the full amount when they file.
Technology of electronic tax payments have three ways to help tax payers. They can authorize a withdrawal from a checking or savings account, they can use the Electronic Tax Payment System, or they can use certain credit cards for their payment.
While tax payers are filing their electronic returns they can give an authorization for the Treasury to take their payment electronically from their bank account. Electronic tax payments can be scheduled to be withdrawn up to the filing deadline of April 15. If this option is not chosen the electronic tax payment will be processed the day the tax return is filed. There is no charge to use the electronic tax payment services. It is similar to any other payment that is withdrawn electronically from your account such as your mortgage payment or your car payment. The only difference is that your electronic tax payment is a onetime withdrawal. Over two million tax payers have used the electronic tax payment option.
Tax payers who request an extension can also authorize an electronic tax payment by phone until midnight on April 15. They will need the adjusted gross income from the previous year’s tax return to authorize the withdrawal. Tax payers will get a confirmation number when the electronic tax payment is complete.
EFTPS is a free service from the U.S. Department of Treasury. Since 1996, tax payments of over ten trillion dollars have been made through this free electronic tax payment system. It allows tax payers or professional tax preparers to make a payment from their phone or their computer. This electronic tax payment system is an excellent way for those who have to pay quarterly payments to make their payment and be able to track it.
Many American have chosen to charge their tax payments. Credit cards accepted for payments are Discover, American Express, VISA, or MasterCard. The payments using credit cards are processed by outside agencies and they do charge a convenience fee. The IRS does not collect or receive the convenience fee. The credit card statement will show the fee as a separate payment from the tax payment.
Tax payers can ask for an installment plan when they file if they cannot pay the full amount that is due. They simply fill out the required form and attach it to their tax return. The form lists the requested monthly payment and the due date. These payments can also be paid through the electronic tax payment methods using your bank account. They will be withdrawn on the due date each month until the balance is paid in full.
The IRS does charge a fee to set up an installment agreement. Interest will also be charged to taxpayers along with a late payment penalty. The penalty is reduced for tax payers who have an approved installment plan with the IRS.