Paying the Piper

published 7 April 2008

We talk a lot about the 100 million or so Americans who get tax refunds every spring, admonishing you to adjust your payroll withholding so that less is taken out of your paychecks every payday.

But what about the 35 million or so who actually have to pay extra tax with their returns? If you're among that minority, how should you handle things?

You could, of course, pay the old fashioned way by writing a check. If you do, make it out to the U.S. Treasury. Congress decided a few years ago that because so many folks think IRS is a dirty word, you shouldn't have to write it on your checks. (Also, it's easy for a crook to change IRS to MRS and add a name to make it look like the check is made out to a married woman.) If you send a check, the IRS would like you to include a 1040-V form to help the agency process your payment more efficiently.

From just $107.88 $24.99 for Kiplinger Personal Finance

Be a smarter, better informed investor.

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

If you are among the growing army of taxpayers who file electronically, you have the option of simply telling the IRS to dip into your bank account for the amount due. If you choose the direct debit option, you can file as soon as your return is done and tell the government not to take the money until April 15. That's not quite as much "float" as if you drop the check in the mail at the midnight deadline, but the convenience should count for something.

Another choice is available whether you file electronically or on paper: You can charge your bill to a credit card. We think this is usually a bad idea because you have to pay a "convenience fee" to pay your taxes. We bet you're paying enough already. If you owe more than you can afford to pay, you should consider using the IRS installment plan. More about that later.

McCormally retired in 2018 after more than 40 years at Kiplinger. He joined Kiplinger in 1977 as a reporter specializing in taxes, retirement, credit and other personal finance issues. He is the author and editor of many books, helped develop and improve popular tax-preparation software programs, and has written and appeared in several educational videos. In 2005, he was named Editorial Director of The Kiplinger Washington Editors, responsible for overseeing all of our publications and Web site. At the time, Editor in Chief Knight Kiplinger called McCormally "the watchdog of editorial quality, integrity and fairness in all that we do." In 2015, Kevin was named Chief Content Officer and Senior Vice President.