Tax preparation and tax planning services to assist taxpayers are not exactly strengths of the IRS. By way of example, on April 15, 2014 the IRS issued as an Advance Release (emphasis added by author) IRS Tax Tip 2014-55 on Ten Tips for Paying Your Taxes. Hopefully you see the humor in the IRS notifying taxpayers on April 15 by issuing an advance release as to how to pay their taxes due that day.
Here is a summary of some of the IRS tips and our commentaries:
- Never send cash. You can pay by check or money order making the payment payable to the “U.S. Treasury.” The IRS suggests that your name, address, and daytime telephone number be on the check and write the tax year, form number, and your social security number in the memo section of the check. For example, the memo section would read “2013 Form 1040” if the payment relates to your 2013 tax return liability. We do not recommend to our clients that they write their SSN on their check because of identity theft concerns.
- Complete Form 1040-V and enclose it with your payment. The IRS requests that you do not attach your payment to the voucher form.
- You can pay your taxes electronically 24/7 on www.irs.gov by clicking on the “Payments” tab found at the top of the home page. If you choose to pay by credit or debit card, the company that processes the payment will charge you a processing fee. You can also choose the EFTPS option on this page. EFTPS is a free service offered by the IRS and stands for the Electronic Federal Tax Payment System. You can use EFTPS to pay the balance due the IRS for the current tax year, and you can also use it to schedule your estimated tax payments up to 365 days in advance. The system allows scheduled payments to be cancelled or changed up to two business days in advance of the scheduled payment date. Thus if your estimated tax liability changes during the year, you simply can go into the ESTPS system and make the appropriate changes to your estimated tax payments. For taxpayers who find it a challenge to remember to pay their estimated taxes by the due dates, they can schedule all payments at once.
- If you e-file, you can file and pay in a single step with an electronic funds withdrawal. This is really a great tool that we encourage our clients to consider, especially for those who procrastinate. This avoids the last minute scramble of getting the check in the mail and postmarked by the due date. What many taxpayers don’t realize is that they can e-file their return as early as they wish and have the funds taken out of their checking account on the due date of April 15. Just because you e-file early does not mean that you need to pay your balance due early.
A future blog will discuss your payment options if you don’t have the funds immediately available to pay your tax liabilities.
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