You might have a sinking feeling when realizing you owe Uncle Sam more money. Fortunately, the IRS offers a few ways to help pay taxes without financial hardship.
Pay by the filing deadline to avoid penalties and interest. If you file before the deadline, you don't have to pay the IRS at the same time. Simply schedule an electronic payment for any time by the April 15th deadline during the Filing steps in TaxAct. One advantage of filing early if you owe taxes is that you'll have time to save up the amount owed.
Use your state refund. If you live in a state with income taxes and are receiving a refund, consider using that money to pay part or all of your federal taxes owed. It typically takes longer for states to issue refunds; but, if you receive the money before the IRS filing deadline, you could use it to pay your taxes owed.
Ask for more time. It never hurts to ask. Occasionally, the IRS grants taxpayers an additional amount of time to pay taxes. To request more time, complete the Online Payment Agreement application at www.irs.gov. You may also call the IRS directly at 1-800-829-1040.
Make a credit card payment.* If you need a couple of extra weeks past the filing deadline to save for the taxes owed, consider scheduling a credit card payment for April 15. This will give you until your next credit card statement date to pay for your tax bill.
*Keep in mind that if you do not pay your credit card in full, the interest you pay on the balance could be more expensive than other payment options.
What if I'm unable to pay the amount owed by the filing deadline?
First, pay as much as you possibly can to help minimize the penalties and interest.
If you cannot pay the remaining balance, set up an Installment Agreement to make monthly payments. TaxAct can help you complete Form 9465 – Installment Agreement Request to be filed with your return. An installment agreement should be considered as a last resort, especially if your only other option is to pay with a credit card and won't be able to pay the balance in full.
The IRS charges additional fees for installment agreements, ranging from $43 to $105 depending on the amount owed and your income.
If you owe money to the IRS, you have several options for footing the bill. If you file early in the season, you have some time to decide how and when you'll pay based on your financial situation.
Looking ahead, you may want to consider adjusting how much federal tax is withheld from your paychecks in order to help avoid paying tax on your return next year. TaxAct can help you complete a new Form W-4 that you can give your employer.
March 1 — Farmers & fishermen
File your 2017 income tax return (Form 1040) and pay any tax due Details
March 10 — Employees who work for tips
If you received $20 or more in tips during February, report them to your employer Details
March 15 — S Corporations
File a 2017 calendar year income tax return (Form 1120S) and pay any tax due Details
March 15 — S Corporation election
File Form 2553, Election by a Small Business Corporation, to elect to be treated as an S corporation beginning with calendar year 2017. If Form 2553 is filed late, S corporation treatment will begin with calendar year 2018.
March 15 — Partnerships
File a 2017 calendar year return (Form 1065) Details
March 15 — Electing larger partnerships
Provide each partner with a copy of Schedule K1 (Form 1065B), Partner's Share of Income (Loss) From an Electing Large Partnership, or a substitute Schedule K1. This due date applies even if the partnership requests an extension of time to file the Form 1065B by filing Form 7004
March 15 — Partnerships
Electing large partnerships: File a 2017 calendar year return (Form 1065-B) Details
March 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule Page 6 Publication 509 applies, deposit the tax for payments in February.
March 31 — Electronic filing of Forms W2
File copies of all the Forms W2 you issued for 2017. This due date applies only if you electronically file.
March 31 — Electronic filing of Forms W2G
File copies of all the Forms W2G you issued for 2017. This due date applies only if you electronically file.
March 31 — Electronic filing of Forms 8027
File Forms 8027 for 2017. This due date applies only if you electronically file.