Getting a tax bill from the IRS can be unnerving particularly if you don’t have the funds available to pay that bill. Don’t ignore it. Waiting to pay an IRS bill will only accumulate the interest and penalties you may have to pay. Here are five tips that will help you avoid any extra charges when receiving and attempting to pay a tax bill.
- Pay electronically. When you use an IRS electronic payment to pay your tax you will have a quick accurate and safe record of your payment. Three options to do this include:
- IRS Direct PayElectronic Federal Tax Payment System
- Credit or Debit Card
- Pay Monthly if You Can’t Pay in Full. If you cannot make the entire payment all at once apply for a payment plan. Lindemeyer CPA can help walk you through the process of setting up payments applying for the monthly payment plan and filing the appropriate forms to break up your payments in a manageable way.
- Use a Direct Debit Pay Plan. A direct debit pay plan is the lower-cost hassle-free way to pay. With this type of plan you pay a set fee that is automatically deducted monthly from your bank account. There is no reminder from the IRS no missed payments and no checks to write and mail. The set-up fee is less than other plans $52 as compared to $120. If you would like to set up a Direct Debit Pay Plan click here for an initial tax consultation with our team.
- Consider an Offer in Compromise. An offer in Compromise allows you to settle your tax debt with the IRS for less than the amount requested. An OIC may be an option if you can’t pay your tax in full. It may also apply if full payment will create a financial hardship. To find out if you may qualify and what a reasonable offer might be use the IRS Offer in Compromise Pre-Qualifier Tool.
- Pay by Check or Money Order. When attempting to pay your IRS bill in full make your check or money order payable to the U.S. Treasury. Be sure to include:
Daytime Phone Number
Social Security Number or Employer ID Number
Tax period and related tax form such as “2013 Form 1040”
Mail your check or money order to the address listed on your notice. Do not send cash in the mail.
If you owe money to the IRS and need help determining which method of payment is best for you the tax professionals at Lindemeyer CPA are here to help. We can assess your financial situation and put a plan together that will work for you. Contact us to learn more.