New to the US? Here are the taxes paying options that you should be aware of.
In the US, taxes must be paid on time failing which you might have to pay heavy penalties. You must always try to make the tax payment in full and on time. There are various methods by which the tax payment can be done.
a.Electronic mode of payment
You can pay your tax directly from your bank account through the electronic mode of payment. This electronic mode of payment can include making your payment through your phone, any other mobile device or by the use of cards.
When you are making your tax payment with the help of either your debit card or credit card, you can use any of the three processors which co-ordinate with the IRS i.e. World Pay US, Link2GocCorporation or Official payments. The service fee which is charged by these processors is tax-deductible. You can make an electronic payment using the IRS2Go app as well. By visiting the Payment page, the payment can be done instantly and even payment can be scheduled in advance. By using a phone or other mobile device you can make the payment for the Electronic Federal Tax Payment System. After your payment, you can receive instant confirmation about the payment.
b.IRS Direct Pay
This is a secure service that you can use for making your tax payment for Form 1040 and estimated taxes. This payment is done directly from your bank account without any charges being levied on you. It is easier for you to check the status of your payment and even receive notifications about your payment. It is also possible to cancel your payment or make changes in the payment for 2 business days before your scheduled payment date arrives.
You can also make your tax payment by cash at participating retail outlets like 7-Eleven. There is a service tax charged for this and it takes 5-7 business days for processing of the payment.
d.By cheque, money order or cashier’s cheque
You can enclose your cheque, money order or your cashier’s cheque along with a copy of your tax return. You have made this payable to the United States Treasury and also provide name, address, TIN, Tax year, Notice number, etc.
In case you are not able to make the full tax payment immediately, you can avail the provision of additional time i.e. up to 120 days and make the payment in full. There are no additional charges levied for this but there is an interest that gets accumulated till the entire amount is paid off. This facility can be availed by the help of the Online Payment Agreement (OPA) or by using toll-free numbers.
e.Pay tax in installments
In case, you are not able to make your full tax payment by the due date or within 120 days then you can opt for a Monthly Installment Plan for making your tax payment. You can request making tax payment in installments by using the OPA application, Installment Agreement Request or Form 9465. You can make your monthly installment payments by using several payment options like
- Payment by debit card or credit card
- Payment by cheque or money order
- Payment by the Electronic Federal Tax Payment System (EFTPS)
- Payment through cash with the help of a retail partner
- Payment is done by direct debit from the bank account
- Payment is done by deduction from payroll
When you are selecting the tax payment to be done by direct debit from a bank account or deduction from payroll, the process is automated and there would be no chances of missing the default payment date.
Usually, if you are selecting a payment plan then IRS would charge additional fees from you for this purpose but if you belong to the low-income taxpayer group then this fee would be reduced or waived based on specific conditions.
Hence, with the various forms of convenient tax-paying options available in the US; filing of tax returns would not be difficult even if you are new to the US.