You can make your IRS payment online in one of three ways, and if you meet the following conditions. You can use your credit card, you can sign up for the IRS’s electronic payment system, or you can set up direct payment from your bank account. Here’s how they work:
IRS Direct Pay
This is for making online payments towards your 1040 return. The IRS website will tell you that you just can’t make estimated payments using Direct Pay, but you actually can. Also, if you are paying on your 1040 but not submitting it yet because you asked for an IRS extension, Direct Pay can actually handle this type of payment even though it says it can’t yet. It can’t handle many types of tax payments but it does handle 1040-ES (estimated payments) and extension payments.*
To use Direct Pay, simply follow these steps:
- Go to the Direct Pay page on the IRS website and click the Pay Now button.
- Choose the type of payment you’d like to make. The choices are:
- installment agreement
- tax return
- estimated tax
- proposed tax assesment
- amended return
- Other (1040 only)
- Choose the tax year for your payment.
- Now you verify your identity. It will ask you for your “filing status” from your tax return which only you should know. Of course you’ll also be asked to enter your Social Security number and contact information.
- Now enter your payment information. You’ll need your checking or savings account number plus your bank’s routing number.
- Now confirm that everything is correct and give your electronic signature.
- Print your receipt and keep as proof that you paid.
Pay Online Using EFTPS
EFTPS stands for the IRS’s online payment system. Once you’re registered with them, you can make payments by phone or online. This is available for businesses or individuals, and payments can be made 24/7.
The beauty of EFTPS is that is can handle all types of tax payments, whereas Direct Pay handles only the short list you see above. For example, with EFTPS you can make the following types of payments online:
- employment taxes
- excise taxes
- estimated taxes
You also get a login, where you can access a dashboard and see all your payments going back 16 months. Enrollment in EFTPS is done at www.eftps.gov. It’s so easy, you will wonder why you didn’t enroll sooner. No more writing checks for the IRS, or worse yet, getting money orders from the Post Office every time you need to pay taxes.
Pay Online Using Your Credit Card
You can use credit card or debit card to pay your taxes online. This sounds like a great option until you find out it’s not free. It’s the only IRS online payment you can make that’s not free, in fact. The IRS simply gives a list of third-party businesses that have been approved to handle credit and debit card payments for the IRS.
Feed for using your debit card are usually a flat fee, ranging from $2.79 to $3.95. For using your credit card, the fee is a percentage of the payment amount, ranging from 1.87% to 2.35%.
Some of the third-party businesses accept only Visa or Mastercard, while others accept American Express and Discover. If your tax payment is over $100,000 then you’ll have to call your credit card company first to let them know what’s coming.
*The IRS expects to add more forms to the Direct Pay system in the future so be on the lookout for developments here.