10 Tips for Taxpayers who Owe

Thursday, April 17, 2014

Owing money on your taxes is never fun, and if you've never owed anything before you may be left questioning exactly what to do. Where do you send the money? Sited from AccountingToday.com, here are 10 tips for taxpayers who owe taxes with their tax returns that were provided by the IRS.

  1. Taxpayers should never send cash.
  2. If taxpayers e-file, they can file and pay in a single step with an electronic funds withdrawal. If they e-file on their own, they can use their tax preparation software to make the withdrawal. If they use a tax preparer to e-file, they can ask the preparer to make their tax payment electronically.
  3. Taxpayers can pay taxes electronically 24/7 on IRS.gov. Just click on the ‘Payments’ tab near the top left of the home page for details.
  4. They can also pay by check or money order. They should make their check or money order payable to the “United States Treasury.”
  5. Whether they e-file their tax return or file on paper, taxpayers can also pay with a credit or debit card. The company that processes their payment will charge a processing fee.
  6. Taxpayers may be able to deduct the credit or debit card processing fee on next year’s return. It’s claimed on Schedule A, Itemized Deductions. The fee is a miscellaneous itemized deduction subject to the 2 percent limit.
  7. Taxpayers should be sure to write their name, address and daytime phone number on the front of their payment. Also, they should write the tax year, form number they are filing and their Social Security number.
  8. Taxpayers should complete Form 1040-V, Payment Voucher, and mail it with their tax return and payment to the IRS. They should make sure they send it to the address listed on the back of Form 1040-V. This will help the IRS process their payment and post it to their account. The form is available on IRS.gov.
  9. The IRS reminds taxpayers to enclose payment with their tax return but do not staple it to any tax form.
  10. For more information, call 800-829-4477 and select TeleTax Topic158, Ensuring Proper Credit of Payments. You can also get information in the instructions for Form 1040-V.