Quick overview

Paying the IRS electronically is usually faster and more secure than mailing a check. The main choices are:

  • Direct Pay (bank account transfer, no IRS fee)
  • EFTPS (Electronic Federal Tax Payment System, free; best for businesses and recurring payments)
  • Credit/debit cards and third‑party ACH processors (convenient, processor fees apply)
  • Online Payment Agreement (installment plans, setup fees may apply)

I’ve helped clients choose among these for more than 15 years. In practice, Direct Pay and EFTPS avoid processor fees and are the lowest‑cost options for most taxpayers.

Main electronic payment options (what they are, pros, cons, and fees)

Direct Pay

  • What: IRS service that transfers funds directly from your checking or savings account.
  • Pros: No IRS or processor fee; no enrollment required; scheduled payments possible for many tax types.
  • Cons: Available only for individual tax accounts (not most business tax payments).
  • Practical note: Always save the confirmation number and check your bank to confirm the debit date.

(See our in‑depth guide: Direct Pay.)

EFTPS (Electronic Federal Tax Payment System)

  • What: Government-run system for federal tax deposits. Widely used by businesses and individuals who make estimated tax or recurring payments.
  • Pros: No service fee from the government; supports scheduled and recurring payments; good for payroll and quarterly estimates.
  • Cons: Enrollment is required and may take a few days to activate; you must keep your PIN and password secure.

(Compare EFTPS with other methods in: IRS Payment Options Compared: EFTPS, Direct Pay, and Debit/Credit.)

Credit/Debit cards and third‑party processors

  • What: The IRS accepts card payments through private payment processors. The IRS does not charge the fee — the processor does.
  • Fees: Processor fees vary and are set by the vendor; typical card fees are a percentage of the payment (commonly around 1.8%–2.5% as an approximate range) and some ACH/ debit transactions have a small flat fee (often a few dollars). Always check the processor’s fee page before confirming.
  • Pros: Convenience and instant payment posting in many cases; useful when you need credit card rewards or cannot use a bank account.
  • Cons: Fees can be material on large payments. Fees are nonrefundable even if your tax situation changes.

Online Payment Agreement (installment plans)

  • What: If you cannot pay in full, you can request an installment agreement (online or by form). The IRS offers several plan types, including direct debit installment agreements.
  • Fees: Agreement setup and user fees can apply, though reduced or waived for low‑income taxpayers or when enrolled in direct debit. Fee amounts and eligibility rules can change; check the IRS Online Payment Agreement page for current details.
  • Pros: Avoids enforced collection actions and spreads payments over time.
  • Cons: Interest and penalties continue to accrue on the unpaid balance until paid in full.

(For setup options and steps, see: Using IRS Electronic Tools: Direct Pay, Online Payment Agreement, and EFTPS.)

How to pay electronically — step by step

  1. Pick the appropriate method (Direct Pay or EFTPS to avoid fees; card if you need convenience).
  2. Gather details: SSN/EIN, tax year or form number, amount due, bank account routing and account numbers (for bank transfers).
  3. Choose a payment date. Schedule early to avoid deadline delays.
  4. Complete the transaction and save the confirmation number and receipt PDF.
  5. Verify the payment posted on your IRS account (irs.gov/myaccount) and your bank statement.

Timing and posting

  • Many electronic payments post the same day, but bank clearing may take 1–3 business days. Allow extra time around tax deadlines.
  • Processors typically provide an immediate confirmation but still disclose a settlement window — keep the receipt.

Common mistakes to avoid

  • Using a card without checking the processor fee first.
  • Waiting until the last day — bank holds and system slowdowns can cause late payments.
  • Not saving the confirmation or checking that the payment posted to your IRS account.

Practical tips

  • Use Direct Pay or EFTPS for large balances to avoid percentage fees.
  • For recurring estimated taxes, enroll in EFTPS to schedule payments in advance.
  • If you set up an installment agreement, enroll in automatic direct debit to reduce setup fees and missed‑payment risk.
  • Always confirm the processor name and fee amount before authorizing a card payment.

What happens if you miss a payment?

Interest and penalties typically continue to accrue on unpaid tax. If you miss a payment, contact the IRS quickly to request a payment arrangement or to correct a posting error. For serious collection issues, consult a tax professional.

Sources and where to check current fees

Professional disclaimer: This article is educational and not individualized tax advice. Rules, fees, and IRS processes change; confirm current details on the IRS site or with a tax professional before making payments.