What If You Owe the IRS for 2018?

Photo by Sharon McCutcheon on Unsplash

You’ve probably heard in the news. Some taxpayers who usually get a refund are paying more taxes when they file for 2018. That nasty surprise is due to the IRS lowering tax withholding amounts and other changes from the 2017 Tax Cuts and Jobs Act.

So what do you do if you owe the IRS? Here are your options:

Electronic Debit With Your Return

The quickest and easiest method for paying taxes due when you file is to set up an electronic debit/withdrawal from your checking or savings account. The IRS (and some states) will even let you file now and post-date the payment up until the due date. You can set up the debit through your tax software, or ask your paid tax preparer to set it up for you.

Mail Payment Voucher with a Check

Snail mail is still available to pay your taxes, at least for now. When you electronically file your taxes (which is highly recommended to tamp down on identity theft and human error), indicate that you are paying by check using a payment voucher, or IRS 1040-V. Use your tax software (or ask your paid preparer) to prepare the coupon with the mailing address and your Social Security Number pre-printed on it. Mail the coupon and a check with your Social Security Number, “1040” and the tax year in the memo line.

Direct Pay at the IRS Website

The IRS is great at using technology to make it easy to pay your taxes. Go to https://www.irs.gov/payments/direct-pay and follow the instructions for the payment option that works best for your situation. Best of all, it’s free.

Installment Plan

Not enough money to pay of your taxes now? The IRS offers an installment payment plan. A short-term plan for up to 120 days has no set-up fee. Longer term plans are available for a fee. It just takes a few minutes to apply at this link https://www.irs.gov/payments/online-payment-agreement-application. You’ll get an immediate notification of whether your application is approved.

Owing more when you file your 2018 taxes is bad news. Some good news that will help soften the blow – the number of options that the IRS (and some states) offers for you to pay up. Whether you can pay it all now or need some more time, there’s an option that will meet your situation.