When you’ve completed your tax return and discover that you owe money, it’s never good news. You do, however, have a few options for paying down your debt, even if it exceeds your cash reserves.
Electronic Federal Tax Payment System (EFTPS)
The US Treasury Department’s Electronic Federal Tax Payment System (EFTPS) is a web service for processing federal tax payments. Your bank account information must be entered into a profile account.
However, you can then pay for a variety of tax responsibilities, such as extension payments, projected taxes, and even tax amounts from prior years. You can make a payment ahead of time. It will be automatically deducted from your bank account on the day you specified.
Direct Pay is a comparable web service from the IRS and is also an available option to send payments. Because this site does not save your bank account or personal information, you will have to enter it all again each time you want to make a payment.
If you set payments for a future date, you can go back in and amend or cancel it up to two working days before the due date.
U.S. Postal Service
You can also submit your money to the IRS by mail, using a check. Depending on the type of payment and where you live, the IRS offers multiple addresses for payments. The IRS website has a comprehensive list of addresses to help you decide which one to use.
Set Up A Payment Plan With The IRS
If you can’t pay everything you owe right away, the IRS provides payment arrangements. The main thing is that you do not disregard your situation in the hopes that it would go away; it will not. With the IRS, you can set up a monthly installment arrangement to pay what you owe over time.
You can even choose, to some extent, how much you wish to pay each month. Because the entire balance must be paid off within 72 months, your minimum payment will be the amount owed divided by 72.
Resolve Your Tax Bills
If you’ve found yourself in a nasty mess with the IRS, take a deep breath. For taxpayers who may have difficulty paying off an excessive amount of tax debt, there’s a new and improved relief program that consolidates many major relief programs into a one-size-fits-all assistance program. Any issues regarding back taxes, unfiled years, or any other tax-related problems may be solved through one program; the IRS Fresh Start Program!
Considering that the Fresh Start Program is a federal program, you would think meeting the qualifications may be very difficult, but really, it’s a lot simpler and quicker than you think. Take the following steps in order to find out if you are eligible in as little as 3 minutes.
- Fill out some basic information about yourself and your back taxes here.
- Have a representative reach out to you to discuss your eligibility.
- Go through the enrollment process and finally reduce or eliminate your tax liabilities.