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.
October 11 — Employees who work for tips
If you received $20 or more in tips during September, report them to your employer - Details
October 14 — Everyone
Federal Holiday (Columbus Day) - Details
October 15 — Individuals
If you have an automatic 6-month extension to file your income tax return for 2018, file Form 1040 and pay any tax, interest, and penalties due - Details
October 15 — Corporations
File a 2018 calendar year income tax return (Form 1120) and pay any tax, interest, and penalties due. This due date applies only if you timely requested an automatic 6-month extension Details
October 15 — Partnerships
Electing large partnerships: File a 2018 calendar year return (Form 1065-B). This due date applies only if you were given an additional 6-month extension - Details
October 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in September.
October 31 — Certain small employers
Deposit any undeposited tax if your tax liability is $2,500 or more for 2018 but less than $2,500 for the third quarter.
October 31 — Federal unemployment tax
Deposit the tax owed through September if more than $500.
October 31 — Social security, Medicare, and withheld income tax.
File Form 941 for the third quarter of 2019. Deposit or pay any undeposited tax under the accuracy of deposit rules .If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until November 10 to file the return.