As the payment alternatives continue to evolve in the economy, so too are the payment options available to you to pay your tax bill. Here is what’s available to you this tax filing season along with each option’s related costs.

Various payment methods to pay taxes

1. Electronic funds withdrawal. This comes out of the checking or savings account noted on your 1040 tax return. There is no charge for this service.

2. Send in a check. Use an IRS voucher for this. Write your check out to the U.S. Treasury and send it via certified mail.

3. Pay with a credit card. The IRS provides two vendors (called merchant banks) for this service: Pay1040 and ACI Payments. There is an interchange rate charged to you ranging from 1.75% to 1.85% with a minimum fee of $2.50.

4. Pay with a debit card. Again there are various services that provide this with a fee of $2.10 to $2.15.

5. Pay by digital wallet or cash. This usually involves a $1.50 fee

6. Drop off cash payment, including to one of 60,000 locations. Yes, you can still bring in your tax payment to designated locations and pay in cash. If this is the option you take, you will need an appointment. Details can be found here.

Available payment suppliers

Debit/Credit: Visa, Mastercard, Discover, American Express, Star, Pulse, NCYE, ACCEL, AFFN, Cirrus, Interlink, Jeanie, Shazam, Maestro

Digital Wallet: Click to Pay, PayPal, Venmo

Cash: Vanilla Direct

Interesting notes

– If you have an online IRS account, you can make payments within this secure setting.

– IRS offices still allow for walk up payments in cash. Just make sure you have an appointment and follow online instructions.

– There are limits to the number of credit card transactions you can make in a year. You also need to get approvals if you think payments may exceed $100,000.

– If you find you cannot pay your taxes, there are also installment payment plans.

Nancy J. Ekrem, CPA
Managing Shareholder
DME CPA Group PC
Certified Public Accountants & Business Consultants
nekrem@dmecpa.com

425-640-8660