Paying Your Tax Bill Online

Paying Your Tax Bill Online

Most taxpayers are probably used to receiving their tax bill and cutting a check to the IRS and state taxing authorities. For those that don’t know, there are now many ways to pay your individual taxes online. This includes estimated tax payments throughout the year, your balance due at filing, and a variety of other taxes. There are multiple options for payment that are easy to use, and some are completely free of charge.

For making payments for federal personal income taxes, there are two main options:

1. IRS Direct Pay: This is the IRS’ secure payment method where you can make a payment directly from your bank account. There are no fees for this service and the IRS does not keep your bank account information on record. We have used this method and have found it to be very easy to use.
2. Third Party Payment Processers: There are a variety of third-party payment processors through which you can pay by credit or debit card. Make sure you go to the IRS website below to make sure you are using a payment processor that is approved by the IRS. The biggest downside to this payment method is that there are fees involved. The credit card fees are typically around 2%, so you will want to avoid this method if possible, although in some situations it could be warranted.

(https://www.irs.gov/payments/pay-taxes-by-credit-or-debit-card)

Most state tax authorities also now have portals or online payment options. For example, if you pay taxes in Maryland, you can make both estimated payments and your year-end tax balance payment electronically directly to the Comptroller of Maryland. To make a payment electronically through their system, you will just need to provide some basic personal information and verify your adjusted gross income from your most recent tax return.

While this may not be a deciding factor for whether to make your payment online or not, there is some societal value from individuals making their tax payments online as well. With the IRS continuing to face budget issues and low staffing, making payments online will ultimately help the agency. It’s easier for them to handle an electronic payment that is linked to your tax account then it is to take a manual check and form and process it.

Of course, there is nothing wrong with the traditional route of paying by check. But many taxpayers may find it far more convenient to pay electronically through one of the different methods discussed above. If you need additional information on paying taxes online, your best resources will be the IRS websites, state taxing authority websites, and your tax preparer.