Paying your tax bill in full and on time to the IRS is essential to avoid costly penalties, accumulating interest, and potential collection actions such as liens or levies. This guide provides a clear, step-by-step explanation of how to make a full payment to the IRS efficiently and securely.
What Does “Full Payment” Mean?
A full payment to the IRS means paying the total tax amount owed for a tax year, covering not only the calculated tax liability but also any penalties or interest assessed if you filed or paid late. It is not a partial or installment payment but the complete balance due.
When Is the IRS Full Payment Due?
The typical due date for filing your federal tax return and making your full payment is April 15th each year, unless that day falls on a weekend or federal holiday, in which case the deadline may shift. If you file under an extension, payment is still generally due by the original deadline to avoid penalties.
How to Make Your Full Payment to the IRS
The IRS offers several ways to pay your tax bill. Electronic payments are recommended for their speed and security, but you can pay by mail or in person as well.
Electronic Payment Options
- IRS Direct Pay: This free service debits your bank account directly with no fees. Payments are credited immediately upon completion.
- Credit or Debit Card: Payments made via card are quick but incur processing fees ranging from about 1.87% to 1.99%. Choose this if you need convenience but watch for extra costs.
- Electronic Federal Tax Payment System (EFTPS): Suitable for individuals or businesses who prefer scheduling payments in advance or making regular tax payments. EFTPS is free but requires enrollment.
Mail Payments
Paying by check or money order involves mailing your payment along with Form 1040-V, the payment voucher, to the correct IRS address based on your state. Include your Social Security number and tax year on your payment. This method is slower as it can take up to two weeks to process.
In-Person Cash Payment
Less common and requires an appointment, you can pay in cash at select IRS offices. This method is immediate but inconvenient for most taxpayers.
Step-by-Step Guide for Making a Full Payment
- Calculate Your Total Tax Owed: Use your completed tax return or IRS notice to confirm the exact amount due, including any penalties or interest.
- Select Your Payment Method: Choose electronic payment for speed and convenience or mail a check with the correct forms.
- Submit Your Payment Promptly: Follow instructions carefully for your chosen method to ensure the IRS receives and applies your payment correctly.
- Save Your Payment Confirmation: Keep electronic confirmations, receipts, or canceled checks as proof of payment.
- Verify Payment Processing: Check your IRS account online to make sure your payment was credited and applied correctly.
Why Make a Full Payment?
- Avoid Late Payment Penalties and Interest: Paying the full amount by the deadline prevents the IRS from charging additional fees.
- Protect Against Collection Actions: Unpaid taxes can lead to liens on property or levies on wages and bank accounts.
- Ensure Future Refunds Are Not Applied Elsewhere: If you owe back taxes, the IRS can hold your current refunds to offset those amounts.
Common Mistakes to Avoid
- Missing the payment deadline, which triggers penalties and interest.
- Mailing payments to incorrect IRS addresses, resulting in delays.
- Failing to include Form 1040-V with mailed payments, causing misapplication.
- Using a credit card without considering processing fees.
Managing Large IRS Tax Payments
If you cannot pay in full, consider applying for an IRS installment agreement or explore options like an Offer in Compromise. The EFTPS system is helpful for scheduling payments ahead.
Examples
- Sally used IRS Direct Pay to pay her $3,000 tax bill online on time and avoided fees and penalties.
- John mailed a check without including Form 1040-V, causing payment delays and additional charges.
Who Needs to Make Full Payments?
This applies to individual taxpayers, self-employed professionals, small businesses, and corporations required to pay federal income taxes.
FAQs
Can I pay the full amount after the deadline? Yes, but expect penalties and interest.
Is paying by credit card advisable? It’s convenient but watch for fees.
What if I can’t pay the full amount at once? Contact the IRS for payment plan options.
How do I confirm my payment was received? Use IRS online accounts or keep your confirmation receipts.
Summary of IRS Payment Methods
| Payment Method | Fees | Credit Speed | Ease of Use | Best For |
|---|---|---|---|---|
| IRS Direct Pay | None | Immediate | Very Easy | Most individuals |
| Debit/Credit Card | 1.87%-1.99%* | 1-3 days | Easy | Convenient payments |
| EFTPS | None | Same Day | Moderate** | Businesses, scheduled payments |
| Check/Money Order | None | 1-2 weeks | Mailing required | Paper payers |
| Cash (In-person) | None | Immediate | Less common | Select IRS offices |
*Fees vary by processor. **Requires enrollment.
For more details, visit the official IRS payment page here. You can also consult IRS Publication 17 for comprehensive tax payment instructions.
Making a full IRS payment promptly helps maintain good standing with the tax authorities and avoids unnecessary financial consequences. Plan ahead, use the right payment method, and keep records to ensure a smooth process.
