You have these options for paying your taxes online

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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 129 million people filed electronically, many because they were due refunds that were processed more quickly since their tax data were sent online.

Now the IRS is working to persuade 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 credit card and debit card tax payments

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% to 2.25% of your tax bill and debit card fees of up to $3.95 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 2016 return next year.

Direct Pay

With IRS' Direct Pay option, there is no pre-registration and 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, 7 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 handy, one filed within the past 6 years, 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.

Electronic funds withdrawal

Individuals who file via computer, either on their own or with the help of a paid preparer, can also use electronic funds withdrawal, or EFW. This basically is the reverse of the direct deposit that the IRS recommends for those getting refunds.

When you get to the end of your computer tax-filing chores and find you owe, EFW will be one of your payment choices. Have your checkbook handy -- not to write a check, but to enter some account numbers that the IRS wants. You'll be asked for your personal account number, what type of account it is (savings or checking) and the financial institution's routing number.

If you don't know which set of numerals is the routing number, check with your bank before you e-file -- especially if you're planning to file (and pay) late on the April deadline day. At 11:50 p.m., there won't be anyone at the bank branch to answer your call for help.

In most instances, electronic funds withdrawal is free. But when you call about the routing number, it wouldn't hurt to confirm that your bank or credit union does indeed allow such transfers at no cost.

One nice thing about EFW is that you can decide exactly when your tax payment comes out of your bank account by scheduling the payment -- as long as it's by the April due date. That means you can get the filing paperwork out of the way early and hold on to your cash until the last minute.

Electronic Federal Tax Payment System

You can also avoid credit card and possible bank fees by using the federal Electronic Federal Tax Payment System, known as EFTPS. Businesses have been using EFTPS for years to directly transfer various taxes to the IRS. Now the agency is stepping up efforts to get individual taxpayers to use the system.

EFTPS is a free service and is available year-round. Individual taxpayers can make use of EFTPS to pay taxes associated with more than 2 dozen tax forms, including the family of 1040 forms (estimated and amended returns, too).

You must, however, enroll and get a personal identification number and password before you can use the service. It's a 2-step process that involves a confirmation sent through the U.S. Postal Service, so don't wait until the last minute if this e-payment option appeals to you. And, again, check with your bank to see if it charges a transfer fee.

As with Direct Pay and electronic funds transfers, EFTPS users can make payments 24 hours a day, 7 days a week -- and schedule payments in advance. The online system also lets taxpayers review the last 16 months of their tax-payment history and search, print or download the data by date, tax type, amount, tax form and other factors.

Cash payments, too

New in 2016 is an option to pay your tax bill in cash. The IRS has partnered with Official Payments and PayNearMe to allow taxpayers to make cash tax payments at participating 7-Eleven stores.

The process does take some planning, so don't expect to walk into your local convenience store on the tax due date and settle your account with the IRS. Also, in this inaugural filing season that the cash option is available, you'll find it in 7-Eleven stores in just 34 states. The Bankrate Taxes Blog post on paying your taxes in cash offers details on this new option.

For more information on electronic tax options, check out the Bankrate feature "Ways to electronically file your return" and "Getting the most from tax software" for selecting tax software with which you can electronically file your return and pay any tax due.


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