We talk a lot about the 75 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 50 million or so who actually have to pay extra tax with their returns? How should you handle things if you owe the IRS more money?
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 you shouldn't have to write IRS on your checks because so many folks it's a dirty word. (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 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 midnight April 15, 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." We bet you're paying enough in taxes already. If you owe more than you can afford to pay, you should consider using the IRS installment plan. More about that on Monday.
GETTING STARTED
