Fi$callyFit: 3 Ways to Pay Your Federal Income Tax

If you owe taxes but can’t pay the full amount by the April 18 deadline you should still file your return on time and pay as much as you can to avoid penalties and interest. You should also contact the Internal Revenue Service to ask about alternative payment options.

Here are three alternative payment options you may want to consider:

1. Additional Time to Pay.
Based on your circumstances, you may be granted a short additional time to pay your tax in full. A brief additional amount of time to pay can be requested through the Online Payment Agreement application at http:www.IRS.gov or by calling 800-829-1040. Taxpayers who request and are granted an additional 60 to 120 days to pay the tax in full generally will pay less in penalties and interest than if the debt were repaid through an installment agreement over a greater period of time.

2. Installment Agreement.
You can apply for an IRS installment agreement using the web-based Online Payment Agreement (OPA) application on IRS.gov. This application allows taxpayers who owe $25,000 or less in combined tax, penalties and interest to self-qualify, apply for, and receive immediate notification of approval.

You can also request an installment agreement before your current tax liabilities are actually assessed by using OPA. You may complete and submit a Form 9465, Installment Agreement Request, make your request in writing, or call 1-800-829-1040.

For balances over $25,000, you are required to complete a financial statement to determine the monthly payment amount for an installment plan.

3. Pay by Credit Card or Debit Card.
You can charge your taxes on your American Express, MasterCard, Visa or Discover credit cards. Additionally, you can pay by using your debit card. However, the debit card must be a Visa Debit Card, or a NYCE, Pulse or Star Debit Card.

To pay by credit card or debit card, contact one of the service providers at its telephone number or Web site listed below and follow the instructions. There is no IRS fee for credit or debit card payments, but the processing companies charge a convenience fee or flat fee. If you are paying by credit card, the service providers charge a convenience fee based on the amount you are paying. If you are paying by debit card, the service providers charge a flat fee of $3.89 to $3.95.

Do not add the convenience fee or flat fee to your tax payment.

The processing companies are:

Link2Gov Corporation:

888-PAY-1040 (888-729-1040)

www.pay1040.com

RBS WorldPay, Inc.
888-9PAY-TAX (888-972-9829)

www.payUSAtax.com

Official Payments Corporation

888-UPAY-TAX (888-872-9829)