You’ll be glad to know that there are several low-cost and free options for you to pay your taxes. That said, some methods come with fees, penalties, and interests. To calculate your taxes better and get an idea of the fees and interests, using a tax calculator such as Taxfyle would help you manage your taxes and finances.
Paying directly from your bank account
Once you know what forms to use and what taxes you need to pay, it’s time to make the payment if you have a balance owed. The easiest way is to pay your tax bill via electronic bank transfer from your bank account. There are no fees charged for this transaction, which is usually processed through the Automated Clearing House network. On a side note, just check with your bank if they charge any fees for ACH transfers.
- Using your debit or credit card
When you file your taxes via an electronic filing system, you get the option of paying using a debit or credit card. There are different processing fees depending on your service provider, but generally, it begins at 1.87% for credit cards and a flat fee of $2 for debit cards.
If you go for a same-day wire transfer, you may be charged for transaction fees by your bank. You may also need to fill out a same-day taxpayer worksheet if you make your tax payment via wire transfer. This worksheet will be used by the bank to transfer your money.
Money order or check
Sending a check or money order is also possible if you want to mail your return to the IRS. Make sure that you follow the directions given by the IRS when filling out the payment.
Payment via cash
Cash payments aren’t accepted by mail. However, you can make a cash payment at participating 7-Eleven stores located in 44 states throughout America. Be careful, though, as there’s a $1,000 limit per day and a $3.99 fee for every transaction. You also need to be wary of the five to seven business days processing time.
3 Alternatives if You Don’t Have the Money
Create a payment plan with the IRS
The IRS offers short and long-term payment plans. The short-term is for 120 days with no fees, though there are penalties and interests. The long-term payment plans are longer than 120 days, and there’s a $31 setup fee for online enrollment in direct debit payments from your checking account. If you apply by phone, mail, or in person, this fee is up to $225.
Delay collection with the IRS
You can also call up the IRS and request a delay in collecting your taxes if you can’t meet the payment deadline. This entails filling out paperwork even before getting your request approved. There are also accrued interests and penalties that add up to your existing tax amount.
Getting a personal loan
You can also get a personal loan if you have a good credit history. The interest rate on a personal loan may be higher than charges imposed by the IRS, although a lot of people find it mentally easier to cope with a loan rather than owe the IRS. A personal loan will allow the flexibility of spreading your payments over a longer period, compared to the IRS’ payment plans.