How to Expeditiously Make Verifiable & Instant Payments to the IRS

How to Expeditiously Make Verifiable & Instantaneous Payments to the IRS

In an earlier blog, we discussed how realtors can avoid being assessed IRS penalties for failure to pay estimated income taxes during the year. That same strategy is also effective for eliminating a large balance due April 15. If realtors or any self-employed individuals follow the strategy we outlined in that earlier blog and are disciplined, they can avoid receiving IRS assessment notices and being placed in collections.

In this blog we discuss how the IRS allows taxpayers to make payments that are easily made and the taxpayer will receive an instant payment confirmation.

Today, many taxpayers continue to pay the IRS “the old-fashioned way”. They write a check, address an envelope after researching the mailing address, stamp it, and hope that the IRS receives the payment by the due date. If they are concerned about proving that the payment was timely mailed, they send the payment by certified mail (requiring a trip to the post office and an additional cost in terms of time and money) and then wait for the green post card to arrive.

There Is a much better way! Go the IRS websites for making payments. Look for the Pay Your Taxes Now which allows you make an electronic payment from your checking account for FREE by clicking on the Direct Pay button. For those who wish to pay by credit card, the IRS allows both credit and debit cards – but for a fee. 

The Benefits of Using the IRS Website for Tax Payments       It is a secure site, you save on postage, and no need to go to the IRS.

1. 1.        You will receive an instantaneous confirmation of the scheduled payment.
   2.        You can schedule your payment today for a future payment date. Thus, the money stays in your account until the due date. There is no worrying about whether your mailed payment will be timely processed by the IRS. Although the date of mailing is controlling, IRS clerks sometimes erroneously enter the date received rather than the postmark date. This eliminates the need for certified mail.
   3.        The IRS cannot claim that your estimated payment was not received. If you sign up for email confirmations, the IRS website provides confirmation of the timely payment. If you mail your payment to the IRS, the USPS has been known to occasionally lose a piece of mail. There are court cases where the IRS claimed a tax form was not received, and the taxpayer’s certified mailing did not satisfy the IRS or the court. A certified receipt shows that something was mailed, not what was mailed.
   4.        Convenience and flexibility. Let’s say your tax professional tells you that you should make estimated payments of $52,000 for the year. Typically, four installments of $13,000 would be made on April 15, June 15, September 15 of the current year and January 15 of the following tax year. You are not sure that you will have not much money available when those payments are due.  However, your budget can afford a $1,000 monthly payment which you can schedule in advance on the IRS website (via the IRS's EFTPS payment option plan).
   5.        This month you had no closings, hence no commission income, and you had an unexpected medical bill which prevents you from paying that scheduled $1,000 payment. No problem, you can also modify or cancel a scheduled payment until two business days before the payment date.
   6.        Not sure if you made earlier estimated payments and not sure of the dollar amounts. Or, you simply want to provide your tax professional with a summary printout of your estimated payments. You have the ability to view your payment history by accessing your online IRS account.

The “Cons” of Using the IRS Website for Tax Payments

•         The IRS website occasionally shuts down for maintenance for outages or security upgrades. This only becomes a problem if you wait until the last minute. Plan ahead! Hours of operation are limited to Monday to Saturday: Midnight to 11:45 p.m. ET and Sunday: 7 a.m. to 11:45 p.m. ET. If these hours are a problem for you, you are likely looking for an excuse to justify missing a payment.
•         The system won’t accept more than two payments within a 24-hour period.
•         Each payment must be less than $10 million. For larger electronic payments, use EFTPS or same-day wire. 

If you are not already subscribed to the IRS’s Direct Pay system, why are you waiting? Immediately subscribe. If you would like to first see how the system works, make a nominal payment of $10.00 to see how easy it is to use Direct Pay.

If you have any IRS tax debt issues or tax planning issues, feel free to contact me at (610) 594-2601 or by email at info@keysolutions.us.

Disclaimer: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information.