IRS - When you owe tax


You may pay tax that you owe on your federal income tax return using the direct pay option. Alternatively you may also send a cheque or a money order with your return to IRS office. You will need to use Form 1040-V which is a payment voucher if case you enclose cheque or a money order. Do not staple your cheque or money order with payment voucher and also do not mail cash with your return. If you use tax-preparation software, consider reading software’s instruction to determine how to make payment through software. If you cannot pay all tax due on you return, you should pay as much as possible to reduce accrual of interest. IRS may also be able to assist you in arranging payments. You might qualify for additional time upto 120 days to pay in full. You might even qualify for monthly installment payment agreement. If you cannot pay and monthly installment does not work, you might wish to propose an offer in compromise. IRS website provides a pre-qualifier tool to confirm if you are eligible for propose an offer in compromise.