Do you have to pay the irs all at once

The deadline for paying personal income taxes to the IRS is April 18, 2023 for the 2022 tax year, unless the due date is extended for a state holiday where you live. Even if you apply for an extension to file your return, you'll need to pay an estimate of the amount you owe by the April deadline.

Let's dig into some other tax deadlines, as well as how you can pay your taxes and what to do if you can't pay by the due date.

Key Takeaways

• Asking for an extension of time to file your tax return doesn't give you more time to pay, but it can be helpful so you can make sure your return is correct and you've claimed every deduction and credit you qualify for.
• The IRS provides two electronic payment systems, Direct Pay and EFTPS, that make it very easy to pay electronically.
• You can apply for an installment agreement with the IRS if you can't pay in full right away. But your outstanding balance will accrue interest.

When To Pay Your Taxes

Generally, federal tax returns and payments are due April 15, but that date can fluctuate. If the 15th is on a Saturday, Sunday, or legal holiday, the deadline will be shifted later. The IRS begins accepting tax returns in January, and if you are owed a refund, it's to your benefit to file early so you can get the money sooner.

Penalties for Late Payments and Filing

If you owe money, you may be tempted to wait until the last possible minute. Just don't leave it too long or you'll owe penalties on top of your tax balance. The penalty for paying late is 0.5% for each month the payment is late, up to 25% of the amount that's due. The penalty goes up to 1% 10 days after the government sends you a final notice that it's going to levy or seize your property.

On top of the penalty for late payment, you'll pay interest. The interest rate is set quarterly and is based on the federal short-term rate plus 3%. It compounds daily.

Late filing penalties are even worse: 5% of your unpaid taxes every month or part of a month that your return is late, up to 25% of your unpaid taxes. If you're more than 60 days late, there's a minimum penalty of $435 (for taxes due in 2022) or 100% of the taxes owed, whichever is less.

Requesting an Extension

You can get an automatic extension of time to file your tax return by submitting Form 4868 to the IRS by the tax filing deadline. Although this won't get you out of having to pay your taxes on time, it gives you until mid-October to thoroughly review and double-check your return, or to have someone else do it for you, to find ways to lower the amount you owe.

Note

For 2022 taxes that are due in 2023, the extended tax deadline is Monday, October 16.

Look for deductions that you might have missed or any miscalculations you might have made. Consult a tax professional or use trusted tax software if you haven't done so already. You might be eligible for a tax credit or a deduction that you overlooked because you didn't even know it existed.

The goal is to reduce your preliminary tax debt, if at all possible. But there's a caveat here. You're supposed to pay your entire tax balance at the time you submit Form 4868 to ask for an extension, based on what you think you're going to owe according to your original calculations.

Don't worry if you end up overpaying on your tax bill. The IRS will send you a refund. At least remit as much as you can if you don't have enough money on hand to pay the entire balance due. Penalties and interest start to accrue right after the due date.

Your Options for Payment

You can pay any tax you owe online, send the IRS a paper check, or ask the IRS for a little understanding. You can often work out payment terms if you're really in a financial bind.

The Electronic Federal Tax Payment System

The Electronic Federal Tax Payment System (EFTPS) is a web service operated by the U.S. Treasury Department for processing federal tax payments. You must set up a profile account with your bank account information and wait to receive credentials in the mail, so it's not an option if you're right up against the payment deadline.

But once you're set up, the site saves your account information, so you don't have to keep re-entering it every time you make a payment. For this reason, EFTPS is particularly good for people who need to pay quarterly estimated taxes, such as those who are self-employed.

You can schedule a payment in advance. It will automatically be withdrawn from your bank account on the date you designate.

Direct Pay

The IRS also offers Direct Pay, a web service that's easier for making quick payments. But this site doesn't retain your bank account or personal information, so you'll have to re-enter all this data every time you want to make a payment.

You can go back in and change or cancel a payment up to two business days before the pay-on date if you schedule the payment for a date in the future.

Debit or Credit Card or Digital Wallet

If you want to pay by debit or credit or use PayPal or another digital wallet, you'll have to go through an approved payment processor. There are three, and all three charge processing fees. Fees vary by processor and payment type. You can access the processors through the IRS website.

Note

Keep in mind that if you pay over time with a credit card or PayPal, you'll pay interest or finance charges on top of the processing fees.

Check

You can also send your money to the IRS the old-fashioned way—just mail a check. The IRS has different addresses for payments depending on the nature of the payment and where you live. You can find a full list of addresses on the IRS website to help you identify which one you should use.

Set Up a Payment Plan

The IRS offers payment plans if you can't pay all or even anything you owe right away. The important thing is that you don't ignore your plight, hoping that it will go away, because it won't.

You can set up a monthly installment agreement with the IRS, allowing you to pay what you owe over time. You can even decide how much you want to pay per month, at least to some extent. The entire balance has to be paid off within 72 months in most cases, so your minimum payment would be what you owe divided by 72. Leave some room for interest and penalties when you're making your calculations.

Note

You're not prohibited from paying more than the amount you've committed to in any month. You can retire the debt sooner and minimize interest charges by doing so.

The IRS will still charge the late-payment penalty as well as interest, but it's reduced to 0.25% a month. There's a one-time setup fee of $130 as of 2022, which increases to $225 if you don't apply online. But if you do apply online and if you agree to have the monthly payments taken from your bank account by direct debit, this one-time processing fee drops to $31. And the IRS offers a low-income setup fee option of $43 if you qualify. Direct debit is required if you owe more than $25,000.

You don't have to qualify for the installment agreement by submitting a collection information statement to prove your assets and income, at least not if you owe less than $50,000. You can apply online using the Online Payment Agreement Application on the IRS website.

Other Options

Depending on how much you owe and your credit, you might want to look into private loan options if you can't pay by the tax deadline. You'll probably pay more in the way of interest. But this would allow you to pay off your tax debt and avoid a payment plan with the IRS. Use a loan calculator to determine whether this option makes sense for you.

Seek advice from a tax professional to evaluate other ways to resolve your tax debt if you can't afford to pay off your tax debt monthly or if you owe more than $50,000. The IRS also considers offers in compromise. The agency might be willing to accept an amount less than what you owe under certain circumstances.

Frequently Asked Questions (FAQs)

How do I pay quarterly estimated taxes?

You may have to pay quarterly estimated taxes to avoid a penalty at the end of the year if you don't have enough taxes withheld from your paychecks or if you receive income from self-employment or another source that doesn't withhold taxes on your behalf. Use Form 1040-ES to calculate your estimated taxes, then submit your payments via mail or through the IRS online EFTPS payment portal before the quarterly deadlines.

How do I pay state taxes?

Each state has its own agency for handling tax filing and payments. Check your state agency's website for more information about how to file and to pay your state and local taxes.

What happens if you don't pay taxes?

You may be subject to penalties and interest on the overdue balance if you fail to file or pay taxes on time. The longer you go without making payment, the more you'll pay in interest (penalties max out at 25% of the amount you owe). The IRS can take further collection actions if you accrue a large enough balance, such as putting a lien against your bank accounts or home. Reach out to the IRS promptly to make arrangements and avoid these penalties if you think you will have trouble paying your taxes.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.