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.
September 2 — Everyone
Federal Holiday (Labor Day) Details
September 10 — Employees who work for tips
If you received $20 or more in tips during August, report them to your employer Details
September 15 — Individuals
Make a payment of your 2019 estimated tax if you are not paying your income tax for the year through withholding (or will not pay in enough tax that way). Use Form 1040-ES. This is the third installment Details
September 15 — S Corporations
File a 2018 calendar year income tax return (Form 1120S) and pay any tax due. This due date applies only if you timely requested an automatic 5-month extension Details
September 15 — Partnerships
File a 2018 calendar year return (Form 1065). This due date applies only if you were given an additional 5-month extension Details
September 15 — Corporations
Deposit the third installment of estimated income tax for 2018 Details
September 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in August.