Options for paying taxes online

Taxes » Tax Filing » Your Online Tax-paying Options

Male paying online with credit card

Consumers are increasingly comfortable with online bill paying. So it's no surprise that Uncle Sam also wants to cash in on electronic money moving.

Leading the way is the federal agency that has the most direct contact with working Americans: the IRS. Last year, nearly 126 million people filed electronically, many because they were due refunds that were processed more quickly because their tax data were sent online.

Now the IRS is working to convince taxpayers that they, too, should go the electronic route when it comes to paying up. The agency has entered into partnerships with the private sector, including the banking industry, tax software developers and credit card processors, to make tax e-payments more appealing.

Here are the ways you can electronically move your money into the U.S. Treasury.

Credit card payments

Taxpayers can tell Uncle Sam to "charge it." And debit cards are part of the mix.

Official Payments, Link2Gov and WorldPay are the IRS-approved plastic processors. Each company accepts payments from electronic as well as paper filers, either via phone or the Internet, in Spanish as well as English.

American Express, Discover, MasterCard and Visa are accepted for charged payments. If you want to avoid potentially costly interest charges, the payment processors also accept some debit or check card payments.

Companies that accept and process credit card and debit card tax payments

CompanyPhone numbersWebsite
Company: Link2Gov Corp.(888)
Company: Official Payments Corp.(888) 872-9829
(866) 964-2552
Company: WorldPay US Inc.(844) 729-8298
(844) 872-9829

Although the companies are now accepting debit as well as credit cards, not all cards are accepted for all payment types. The cards that are accepted will be identified when you make your payment.

Also keep in mind that this electronic payment method will cost you more than just your tax bill. Each company has its own fee schedule, with credit card fees ranging from 1.87 percent to 2.35 percent of your tax bill and debit card fees of up to $3.50 per transaction. Also double-check for convenience fees added in some cases to make tax payments.

And if you don't pay off your credit card in full, you'll start racking up interest charges on your account.

Your tax payment and the convenience fee usually will appear separately on your card statement. If you itemize, note the fee amount. The IRS now allows you to count that as a miscellaneous deduction, so you can add this payment to those expenses when you file your 2015 return next year.

Direct Pay

The IRS introduced a new e-payment option, Direct Pay, in 2014. It does not require preregistration to use. Even better, there are no credit card or bank fees to worry about.

The Direct Pay option is found in the IRS' online Pay Your Tax Bill section, so it's available 24 hours a day, seven days a week. You can schedule payments, including estimated tax amounts, up to 30 days in advance.

To use Direct Pay, you will need to have a prior year tax return, one filed within the last six years, handy to help the IRS verify your identity. The tax year you select does not have to match the year your payment is being applied to since the information is used for identity verification purposes only.

You'll also enter how much you want to pay, the payment type (annual tax bill, estimated, etc.) and the tax year to which the payment applies. Finally, of course, give the IRS your bank information. The IRS does not keep your financial account information in its systems once the cash is transferred.

After you've completed the Direct Pay steps, review your entries, electronically sign the transaction and hit send. You'll get immediate online confirmation that you can print or otherwise save for your filing records.


Show Bankrate's community sharing policy
          Connect with us

Our tax expert Kay Bell provides resourceful tips and advice to help you stay prepared for filing.


Connect with us