Optima Tax Relief Explores IRS Payment Options for Taxpayers

Oct 1, 2020 by

Optima Tax Relief - Crunchbase Company Profile & Funding

Taxpayers are reminded that if they do owe a tax balance after filing their taxes, they should avoid penalties and interest. In the event a taxpayer is unable to pay back their liability, the IRS does offer payment options to assist those who want to remain compliant and out of collections.

Optima Tax Relief explores payment options taxpayers have when dealing with the IRS.

File a tax extension 

  • Taxpayers who need more time to file their federal tax return can apply for an extension to file until October 15. In order to file for an extension, taxpayers should estimate their tax liability on the extension form and pay the amount that is due. 

Pay Electronically

  • Individuals – Taxpayers can use the Direct Pay option on the IRS website. Direct Pay allows taxpayers to pay online directly from a checking or saving account for free. Taxpayers can also schedule payments up to 365 days in advance.
  • Business – For those making large payments, the best payment option is the Electronic Federal Tax Payment System. This system allows up to five payments per day. Taxpayers can schedule payments up to 365 days in advance and must enroll in advance in order to make their payments.

Paying by check, money order or cashier’s check

  • Tax liability – Taxpayers that are paying off a tax liability they owe can pay by check, money order or cashier’s check. A Form 1040-V and Payment Voucher should be included with the payment. Taxpayers are reminded to not send cash through the mail and to indicate the tax year they are making the payment for. 
  • Estimated tax payments – Taxpayers making their payment by check, money order or cashier’s check should include Form 1040-ES payment voucher. The check memo line should also indicate the tax year the estimated tax payment is for.

Payment options that taxpayers can apply for

  • Online payment agreement – This agreement is available to those who owe $50,000 or less in income tax, penalties and interest and businesses that owe $25,000 or less in combined payroll tax, penalties and interest and have filed all tax years. 
  • Installment agreement – Taxpayers who don’t qualify for an online payment agreement option, or choose to not use the online option, can also call the IRS or mail in a request to be placed on a payment agreement. Installment agreements that are paid by direct deposit from a bank account or payroll deduction will help taxpayers avoid defaulting on their agreement.
  • Ask the IRS for an extension – If you need more time to pay your tax liability off, taxpayers can request a delay on the collection process. If the IRS deems that a taxpayer is financially unable to pay back their balance, the IRS can delay the collection process for them until they have the ability to pay it back. 
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