Basic Information on How to Pay Your Taxes

Many times your federal income taxes are already taken care of throughout the tax year by deductions in your paycheck; you may even get a refund when tax time rolls around.

Not everyone fits into this category, however, and if you owe federal income taxes, there are several ways you can pay; remember, though, that the taxes that are due must always be paid by your tax filing deadline (even if you are granted a filing extension), otherwise you may be subject to penalties.

What follows are the different ways you can pay off your tax liability to the Internal Revenue Service (IRS):

1. E-pay.

You may choose to pay your taxes electronically through the IRS online system.

2. Check or money order.

You may also choose to go the traditional route of sending a check or money order made payable to “United States Treasury.” You should always include at least your Social Security (taxpayer) number on the check or money order; you may also want to include the tax year for which you are paying and the type of return you filed, e.g., 2009 1040 form.

For both e-paying and check or money order, you may pay the full amount you owe or a portion thereof, but remember that you may be subject to tax penalties if you have not paid your full tax liability for the year on time. The IRS also offers short-term extensions that can allow to pay up to 120 days past the due date.

3. Installment Agreements

If paying your full tax liability is financially impossible for you, you may apply for an IRS installment agreement. These agreements are based on individual taxpayers’ abilities to pay and are often deducted directly from either your bank account or your paycheck. You may also choose to have a installment plan through which you physically have to make the payments.

What happens if I don’t pay my taxes?

If you do not pay your taxes on time, you may receive a notice from the IRS, which can also be followed by a Notice of Federal Tax Lien. For more information, see IRS Topic 201, “The Collection Process.”