Taxes due in a given tax year are to be paid on or before April 15th of the following year. However, if you ever find that you cannot pay your due taxes before this deadline, you can still apply for other options of tax payments. You should also ensure that you file your tax returns by the due date. There are 4 options that the IRS provides to individuals who are unable to pay their due taxes by the 15th of April:
1. Extension of the Payment Period
Depending on your financial circumstances, the IRS can extend the tax payment period by 60 to 120 days. To get such an extension, you can apply online via the Online Payment Agreement application section of the IRS website. You can also call the IRS telephone number and request for such an extension. Interests are charged on the tax liability for the period of the extension. However, such interests are very low, especially when compared to other options for extended payments.
2. Installment Payment for Taxes below $25,000.00
The IRS also provides another option for payment specifically for those whose tax debt is significantly large and cannot manage to pay off the tax liability in a lump-sum payment. If the taxes owed are less than $25,000.00, including penalties and interest, then one can apply for an Online Payment Agreement to have the tax liability paid over a period of 5 years. For this type of installment agreement, the approval is almost immediate and one can designate the amount of installments to pay as long as the installments will allow the debt to be paid off within 5 years. The agreement does not require any paperwork, such as remittance of financial information, to the IRS. Apart from applying online, you can also apply for this type of installment agreement by calling the IRS telephone number, by making a written request to the IRS, or by filing Form 9465, “Installment Agreement Request Form”.
3. Installment Payment for Taxes above $25,000.00
If you owe more than $25,000.00 in taxes, you will need to contact the IRS and provide all your financial details in a financial statement. These details include your paystubs, bank statements, list of assets and debts, and other financial documentation. The IRS then reviews your financial portfolio and determines the amount of tax payments that you will pay per installment.
4. Credit Card and Debit Card Payments
The IRS has also provides a platform where any taxpayer can now pay their taxes by either debit card or credit card. Therefore, if you still owe taxes by the tax deadline, you can use your credit card to make the payments. The IRS has outsourced the facilitation of the credit and debit card payment to three private companies. These companies are Link2Gov Corporation, Official Payments Corporation, and RBS WorldPay, Inc. You can make your tax payments through the websites of these companies. The IRS does not charge any fee for credit card and debit card payments. However, each of these private companies charges a convenience or flat rate fee.