WASHINGTON ― The Internal Revenue Service today reminded taxpayers with a tax bill that there are several ways to make payments, and there are options for many people who cannot pay the their full tax bill before the April deadline.
The deadline to submit 2021 tax returns or an extension to file and pay taxes due this year falls on April 18, instead of April 15, due to the Emancipation Holiday in the District of Columbia. Taxpayers in Maine or Massachusetts have until April 19, 2022 to file their returns due to the Patriots Day holiday in those states. Certain taxpayers who have been the victims of a natural disaster have even more time to file their returns.
The IRS reminds people to file their taxes in a timely manner and pay whatever they can by the filing deadline to avoid late penalties and interest.
Log in to pay and view payment history
Taxpayers can use their online account
Securely see important information when preparing to file their tax return or tracking balances or notices. Taxpayers can make a same-day payment for a 2021 tax return balance, return extension, or estimated taxes, all of which are due before the April deadline for most taxpayers. They can also view:
- Their adjusted gross income, economic impact payment amounts, and child tax credit prepayment amounts needed for their 2021 return,
- History of payments and scheduled or pending payments,
- Payment plan details and
- Digital copies of certain IRS notices.
Ways to pay
- Electronic Funds Withdrawal (EFW): This option allows taxpayers to file and pay electronically from their bank account when using tax preparation software or a tax professional. This option is free and available only when electronically filing a tax return.
- direct payment: Direct Pay is free and allows taxpayers to securely pay their federal taxes directly from their checking or savings account, with no fees or pre-registration. Taxpayers can schedule payments up to 365 days in advance. After submitting a payment via Direct Pay, taxpayers will receive immediate confirmation.
- Electronic Federal Tax Payment System: This free service offers taxpayers a safe and convenient way to pay personal and business taxes over the phone or online. To register and for more information, taxpayers can call 800-555-4477, or visit eftps.gov.
- Credit card, debit card or digital wallet: Individuals can pay online, over the phone or with a mobile device through one of the authorized payment processors. The processor charges a fee. The IRS does not collect any fees for these payments. Authorized card processors and phone numbers are available at IRS.gov/payments.
- Cash: For taxpayers who prefer to pay cash, the IRS offers a way to pay taxes at one of its cash processing companies at participating retail stores. The IRS urges taxpayers choosing this option to start early because it involves a four-step process. Details, including answers to frequently asked questions, are at IRS.gov/paywithcash.
- Check or money order: Payments made by check or money order should be made payable to “United States Treasury”. To ensure payment is credited promptly, taxpayers should also attach a Form 1040-V PDF payment slip and printing on the front of the check or money order: “2021 Form 1040”; Name; address; daytime phone number; and social security number.
File before April 18, 2022 for most taxpayers
The most important thing anyone with a tax bill should do is file by the April 18 due date, for most taxpayers (even if they can’t pay in full). Taxpayers can also request a six-month extension to file their return before October 17, 2022, to avoid penalties and interest for not filing on time.
Although automatic tax return extensions are available for anyone who wants one, these extensions do not change the payment deadline. This is not a paid extension. To visit IRS.gov/extensions for more details.
Usually, anyone who owes tax and waits after this date to file their return will be charged a late filing penalty of 5% per month. Thus, if a tax return is complete, filing it before April 18 is always less expensive, even if the total amount due cannot be paid on time.
IRS Free File is a quick and easy way to file that is available to eligible individuals and families who earned $73,000 or less in 2021. IRS Free File is available on IRS.gov.
pay what you can
Interest, plus the late payment penalty, will apply to any payment made after April 18. Making even a partial payment will help limit penalty and interest charges. The fastest and easiest way to pay a personal tax bill is to direct payment, available only on IRS.gov. For an overview of other payment options, visit IRS.gov/payments.
The IRS urges taxpayers to consider other payment options first, including obtaining a loan to pay the amount owed. In many cases, the borrowing costs may be less than the combination of interest and penalties the IRS must charge under federal law. Normally, the penalty for late payment is half a percent (0.5%) per month. The interest rate, adjusted quarterly, is currently 3% per annum, compounded daily.
If a loan is not possible, the IRS can often help.
Online payment plans
Most individual taxpayers are eligible to set up a payment plan online with the IRS, and it only takes a few minutes to apply. Applicants are notified immediately if their application is approved. No need to call or write to the IRS. The IRS notes that online payment plans
are processed faster than applications submitted with electronically filed tax returns. If a taxpayer has just filed their return and knows they will owe a balance, they may be able to set up a payment plan online even before they receive a notice or invoice.
There are two main types of online payment plans:
- Short Term Payment Plan – The payment period is 180 days or less and the total amount due is less than $100,000 in taxes, penalties and interest combined. There is no charge to create one, although interest and the late penalty will continue to accrue.
- Long Term Payment Plan – Payments are made monthly and the amount owed must be less than $50,000 in taxes, penalties and interest combined. If the IRS approves a long-term payment plan, also known as an installment agreement, a installation costs
normally applies. But low-income taxpayers may qualify for a fee waiver or refund. Also, for anyone who files their return on time, the late payment penalty rate is halved while an installment agreement is in effect. This means that the penalty accrues at the rate of one-quarter percent (0.25%) per month, instead of the usual one-half percent (0.5%) per month.
Taxpayers who are not eligible for an online payment arrangement may still be able to arrange to pay in instalments. To see Additional payment plan information for more information.
Other payment options
Some distressed taxpayers may also consider using these other payment options:
If the IRS determines that a taxpayer is unable to pay, they may delay collection
until their financial situation improves. However, the total amount due will increase further as penalties and interest are charged until full payment is made. Taxpayers can request an extension by dialing the telephone number of their note or 800-829-1040.
Some taxpayers are eligible for the reduction or elimination of their late filing or late payment penalties. This can be done on a case-by-case basis, depending on reasonable cause. Alternatively, where a taxpayer has a history of compliance, the IRS can generally grant relief under the First reduction program. To visit IRS.gov/penaltyrelief for more details.
Offer in Compromise
Some taxpayers are eligible to settle their tax bill for less than the full amount owed through an offer in compromise. Although there is usually a non-refundable application fee of $205, it is generally waived for low-income taxpayers and for offers based on doubt as to liability. the Bid in Compromise Pre-Qualification Tool can help determine the eligibility of anyone interested in applying.
For more information on payments, see Subject #202, Fee Payment Optionson IRS.gov.
Taxpayers should know before they pay. The IRS encourages all taxpayers to verify their withholding tax with the IRS Withholding Tax Estimator.