TOP-10 Quick and Straightforward Ways to Pay Taxes in USA

Those unfamiliar with the US tax system tend to think you may only make IRS tax payments via a bank transfer. In fact, as things stand, there are currently at least 10 various methods to pay taxes in the US, and you are free to select the one that suits you best. IRS bank transfers are by far not the top choice with American nationals but fresh US immigrants who have just settled down in the country may have no idea thereof.

In the article below, the International Wealth industry pros analyze all available basic options to pay taxes to the IRS. Regardless of the method chosen, the IRS will receive your tax payment in next to no time. The said methods to pay taxes being totally equivalent, you should not worry that your money may get lost or that an incomplete transfer will occur (for additional details, please refer to the How the IRS Calculates Americans’ Foreign Income article on the International Wealth website).

IRS tax payments via special-purpose software

• EFW, Electronic funds withdrawal
• Charge-free tax payments (your bank may collect extra charges).

It is certainly convenient to pay taxes directly via the app used to calculate them. Many companies develop similar software, and certain apps like IRS Free File are controlled and developed in coordination with the IRS itself for US taxpayers to pay taxes the easiest. In this situation, the above apps are treated as standardized. The corresponding transfer is made from your bank account and you can change the app settings where necessary to pay taxes seamlessly. Be advised that you can pay taxes via the EFW app either independently or using tax consultant services, and it is a truly convenient option.

IRS tax payments via the Electronic Funds Withdrawal app: advantages

• Procedure to pay taxes is carried out online
• You are free to bring a third-party tax consultant or tax return expert on board
• Opportunity to make settlement payments is provided for
• Certain tax payments may be scheduled ahead to pay taxes automatically when the time is due, including personal payments and some of the corporate ones
• You can connect several bank accounts to the app and use each account to pay a certain tax or make a certain tax payment.

IRS tax payments via the Electronic Funds Withdrawal app: disadvantages

• With erroneous payments, delays may occur when the IRS makes a refund to your account
• Payment reversals result in extra time spent, 7 to 10 days on average
• After the tax payment has been received and confirmed, you won’t be able to change the payment amount or your profile information.

Direct tax payments to IRS

• IRS Direct Pay.
• Charge-free tax payments.

Feel free to pay taxes directly from the IRS website using the IRS Direct Pay service. The requirements you shall meet to pay taxes therefrom are minimum. You shall have your personality identified, your bank info confirmed, and permit the bank to debit your account. In this case it will be ACH debit. FYI: feel free to efficiently reduce your tax load via Using a Wyoming LLC as an Agency Company for US Merchant Accounts.

IRS tax payments via the IRS Direct Pay system: advantages

• IRS tax payments can be made online
• Option provides for an opportunity to pay estimated taxes, make installment payments, as well as pay taxes under amended tax returns and extend tax payment periods
• Advanced capabilities to schedule tax payments for the year ahead
• Opportunity to cancel scheduled tax payments or postpone them but no more than 2 days since the original scheduled tax payment date
• Automatic email notifications for each tax payment, either made or scheduled
• Same-day tax payments.

IRS tax payments via the IRS Direct Pay system: disadvantages

• Number of tax payments per day may not exceed 2
• Transaction speed is rather low, the IRS will only receive certain payments 2 days after you pay the taxes
• Commercial payments are not allowed. You will experience no issues with making tax money transfers. Yet, in case of several payments only some of which are made to the IRS, transaction issues are inevitable
• current software version does not allow making IRS tax payments from a foreign bank account unless the said bank has branch offices in the US.

IRS tax payments via federal system

• EFTPS, Electronic Federal Tax Payment System.
• No charges.

An appealing online option for those who already used the EFTPS, with a simple and transparent tax payment scheme. Initially, time spent to set up a profile with the system and master working with it may be significant. To be able to use the Electronic Federal Tax Payment System, you will need to set up a profile therein first and enter your ID and bank data. The greatest disadvantage is that you will have to wait for about a week to receive a sign-on password. After that, no issues with tax payments are expected. Beware of tax traps though.

IRS tax payments via EFTPS: advantages

• You pay taxes online
• You can use your phone to pay taxes
• System functions 24/7
• EFTPS can be used to pay any taxes, including, inter alia, corporate and federal ones
• Opportunity to schedule tax payments for a year ahead is available
• Same-day tax payments are possible
• Tax payments can be canceled and/or amended no more than 2 days before the scheduled payment date
• Email notifications may be set up.

IRS tax payments via EFTPS: disadvantages

• Complex and lengthy setup procedure, Direct Pay is much easier to work with by comparison
• Where your bank initiates a tax payment independently, additional fees may be charged.

IRS tax payments via standard same-day bank transfers

• Same-day wire transfer
• Depending on the bank, the fee makes approximately USD 25.

A traditional money transfer, the same-day IRS tax payment can be made via your bank, Neobank, or a payment system. No special-purpose software is necessary therefor, but you will have to follow the terms set by a particular financial institution to pay taxes this way.

IRS tax payments via bank transfer: advantages

• Hgh payment processing speed – it takes up to 24 hours for the payment to be processed and credited to the recipient’s account.

IRS tax payments via bank transfer: disadvantages

• Service terms are defined by the bank, including service availability, costs, and deadlines
• Filling in an IRS taxpayer report is a must. Don’t forget, you shall submit it to the bank on the same day you pay taxes
• You shall fill in and file a separate form for each IRS tax payment
• After the tax payment has been processed, no further changes or amendments may be made therein.

IRS tax payments via debit cards

• Debit card
• Up to USD 2.55 for each payment.

Tax payments are actually made via one of the three independent IRS payment processors. You will have to enter your personal data, debit card details, and the payment amount. If everything is done correctly, the payment processor will transfer your payment to the IRS.

IRS tax payments via debit cards: advantages

• You can pay taxes either online or using your phone
• Option works well with most popular US cards, including PayPal, Visa, Mastercard, Discover, American Express, STAR, Pulse, and NYCE as well as up-to-date digital wallets, including Visa, Mastercard, and American Express. You should ask your financial service provider whether a certain payment option is available.

IRS tax payments via debit cards: disadvantages

• Each payment order is processed and paid separately
• Where a tax payment is above USD 100,000, an approval from the IRS payment processor is required
• It is challenging to cancel tax payments made via debit cards
• Basic principles of personal data protection may be violated in case of the said tax payments.

IRS tax payments via credit cards

• Credit card
• Additional financial expenses make up to 1.98%, with the minimum fee of up to USD 2.69.

IRS tax payments via credit cards function like those via debit cards, and even payment processors are the same. To be exact, they are ACI Payments, Inc, Pay1040, and payUSAtax. NB: extra fees charged are credited not to the IRS accounts but to those of the payment processor.

IRS tax payments via credit cards: advantages

• Payment procedure is analogous to that via debit cards

IRS tax payments via credit cards: disadvantages

• You are likely to lose bonuses that come with your card (say, free miles, financial bonuses, etc.) if you pay taxes to the IRS using it
• Associated interest rates may be high
• You may risk unwanted credit rating changes, where you deposit a large amount of money into your credit card account
• It is challenging to cancel the corresponding tax payment or change the details thereof
• This method to pay taxes to the IRS comes with lower confidentiality.

IRS tax payments via cheques, money orders, or cashier’s cheques

• Cheque, money order, or cashier’s check
• Option dependent on postage rates.

This option to pay taxes to the IRS is a top choice for those new to modern digital technologies. You will have to provide certain personal data in the process, including your address, name, social security number (or your employer’s ID), and your phone number. Mind that this shall be the one you can be reached at during the day or during work hours. The data immediately pertaining to your tax payment are a must. 

IRS tax payments via cheques, money transfers, or cashier’s cheques: advantages:

• You don’t need to have a bank account, including, inter alia, to get your cashier’s cheques
• Money transfers are traced and you will be able to verify whether your particular money transfer has been received by the beneficiary.

IRS tax payments via cheques, money transfers, or cashier’s cheques: disadvantages:

• You will have to personally visit the service provider’s office to be able to pay IRS taxes
• Payment amount is limited to USD 1000
• Significant time delays are a drag
• You face a chargeback risk if you have insufficient funds on the debited account.

IRS tax payments in cash

• Cash
• USD 1.5 USD per payment.

Here comes another option to pay taxes to the IRS without resorting to modern digital technologies. It is a rather tiresome method and regular US citizens only choose it when they have no other alternatives to pay IRS taxes. You will have to first go to the special IRS website and then follow the instructions thereon.

As a next step, the IRS will verify your data and send a confirmation to your email. After the IRS makes sure everything is done correctly and things stand as they shall, they will send you a second email with further instructions and a link with a special code. Following them, you will have to visit a retail store, where a sales person will scan the code and only after that you will be able to pay IRS taxes.

IRS tax payments in cash, advantages:

• You can pay taxes to the IRS even if you don’t have a bank account
• It is possible to save some as compared to paying IRS taxes by money transfer or cashier’s cheques
• Above option is available all across the US.

IRS tax payments in cash, disadvantages:

• Said option to pay taxes to the IRS is available in certain stores and retail chains only
• Payment processing takes up to 2 bank days
• Payment amount is limited to USD 1000 per day (at times, the limit may be set as low as USD 500 per each payment) and up to 2 payments per day
• If you don’t have any cash on you, you will have to go to the bank or withdraw some in the nearest ATM to be able to pay IRS taxes
• You will bear risks associated with carrying a great sum of money around.

IRS tax payments via IRS2Go mobile app

• Mobile via IRS2Go
• Free app.

The service provides for using a smartphone with the IRS2Go mobile app installed to pay IRS taxes. The app uses IRS Direct Pay and comes with standard features allowing cash withdrawals from bank accounts as well as debit and credit cards. The last option comes with additional charges and fees. For more information about receiving payments from US non-residents please visit Payment Processing in the United States for Non-Residents: an Ideal Structure for your Business.

IRS tax payments via IRS2Go mobile app, advantages:

• Practical and convenient option for owners of modern mobile phones
• With security codes generated automatically, the method to pay IRS taxes is more reliable compared to SMS payment confirmation
• Additional features that the app comes with allow searching the web for free specialized software and tax advice and recommendations to efficiently pay IRS taxes.

IRS tax payments via IRS2Go mobile app, disadvantages:

• Only Direct Pay is available
• Payment processing fees are charged where credit or debit cards are used to pay taxes to the IRS.

IRS tax payments by installments

• Installments
• Up to USD 255.

It is one of the few available ways to reduce IRS tax payments,or, to be more exact, pay a portion thereof by installments. For clarity, the payment may be referred to as a tax credit. The IRS comes with 2 standard payment plans, the first one is for 180 days, while the second tax payment plan is a long-term one. The latter is used if the payer’s tax liabilities are too high or the taxpayer has no opportunity to satisfy their tax liabilities in the near future. Please, mind that although it may seem unlikely, You Can Lose Your Passport in the Dispute with the IRS.

IRS tax payments by installments, advantages:

• Simplified registration procedure (you may get registered by mail, by phone, or when you visit the IRS in person to pay taxes to the IRS)
• Low qualification criteria
• In most cases, tax payments by installments are not associated with any penalties except for late payment penalties
• You can set up your phone to pay taxes to the IRS and discharge your tax liabilities automatically by directly debiting your account
• Ample opportunities to restructure or amend standard plans
• Small fees of USD 10 to USD 89.

IRS tax payments by installments, disadvantages:

• Penalties are accrued till the remaining balances have been paid off in full
• Long-term plans come with fees but discounts are available for a number of plans
• Total tax liabilities may not exceed USD 50,000 for long-term plans, and USD 100,000 for short-term ones

It would be a mistake to say that the US tax system is simple and straightforward. Yet it still allows you to pay taxes the way you find the most convenient. Selecting a suitable option to pay IRS taxes in the US is easy as all the information necessary to make the decision thereon is available on the IRS website. If interested in legal tax reduction, you are welcome to contact the International Wealth professionals. They are here to assist you with selecting the most efficient options to pay taxes and achieve your goals.

International Wealth customers favor the following US-related services:

• Non-resident corporation setup in New-York and Texas
• Incorporating an LLC with a US bank account for individuals and outsourcing providers
• Remote account opening with external asset management with the US banks
• LLC incorporation in Delaware or Wyoming (USA)
• Corporate account with the BB&T bank in the US + Belize or Panama corporation.

For any issues or requests related to business management, bank account setup, asset diversification, tax planning, trusts, golden visa or golden passport schemes, you are welcome to approach International Wealth and our high-caliber professionals. It is enough to email us at info@offshore-pro.info with your request to have all issues cleared in next to no time.