Did you get that infamous statement: Federal Tax due now?
When April 15th comes around, you can feel a tinge of anxiety in the air. That’s because there are tens of millions of people who will owe money to the IRS. Now, this is the funny thing about the Internal Revenue Service – they tend to be pretty persistent about wanting their money.
So, you really need to know what the term “Federal Tax Due” means. Knowing this term can keep you in the good graces of the IRS for at least the next 12 months.
So, what does Federal Tax Due mean?
Federal Tax Due simply means how much you owe the IRS. You will likely see this term when you are filing your taxes with tax software such as TurboTax. You will usually find the term on the upper right hand of the page.
If you happen to be one of 8 or 10 people who still file your taxes on paper, then you won’t find the phrase “Federal Tax Due.” Instead, you will find the phrase “Amount You Owe” near the end of the tax form.
The amount that you see next to the “Federal Tax Due” or “Amount You Owe” phrase will be the money that you will have to pay to the IRS.
There are a number of ways that you can pay your federal taxes:
- If you are filing your taxes electronically, you can pay via your checking account. This is known as Direct Pay.
- You can also pay your Federal taxes with a credit card or debit card. If you need to make sure that your payment gets to the IRS fast, then you can use a direct bank wire. Note that banking fees will apply to your bank wire.
- If you are paying your Federal tax via mail, the IRS does accept checks and money orders. Note that the IRS can not accept single checks or money orders over the amount of $100 million.
- Finally, the IRS will allow you to pay cash at a retail partner location. You can pay up to $1,000 cash at these locations. Note that a fee of up to $3.99 may apply per payment.
Friendly Tip: If you are paying over $100 million in taxes, be sure to have the payments spread out over multiple checks or money orders and then fire your tax accountant.
Want to make your tax payments as stress free as possible? Here are some smart tips for you to follow:
- Pay on time – Yes. They may sound overly simplistic. However, making your payment before the IRS tax deadline will help you avoid late penalties and interest rates.
- Use Direct Pay – With Direct Pay, your IRS payment is made directly from your bank account. This is perhaps the fastest and easiest way to make a payment. Also, you will avoid dealing with any fees associated with making your IRS payment.
- If you don’t have the full amount ready, ask for an installment agreement – If you don’t have the full amount to pay the IRS, then file Form 9465 – Installment Agreement Request.
Understanding Federal Tax Payments
Using what “Federal Tax Due” means can ensure that you pay the IRS what you owe. This can keep Uncle Sam happy and ensure that the U.S. government has the trillions of dollars that it needs to build roads, bridges, post offices, and underground zombie bunkers.
I hope this article helped you gain some control of your tax plan this year. Remember not to stress out. Don’t forget to check out Tax Forms page for any additional online tax checklists and forms you may need this year.
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Until the next money adventure, take care from The Handy Tax Guy Team!
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