Tax Withholdings
Paying Your Taxes
Knowing what you owe is the first part of paying your taxes and may be all you need to do. This is because federal income taxes usually are paid throughout the year. If you are employed, income tax withholding on wages and other taxable compensation may cover all or the majority of your annual tax bill.
You may also have paid your tax through quarterly estimated taxes. These are amounts you figure are necessary to cover your annual tax bill (after taking into account any income tax withholding) and avoid penalties. You avoid estimated tax payments and simply choose pay your tax with your return because this option could result in underpayment penalties.
Despite income tax withholding and your best estimates for quarterly tax payments, you may have unexpected tax liability that causes you to owe additional tax when you complete your return. You can pay your tax by:
- Writing a check to the U.S. Treasury
- Charging the amount you owe to a major credit card
- Transferring funds from your bank account to the government using the Electronic Federal Tax Payment System (EFTPS)
If none of these payment options works for you, consider asking the IRS for an installment payment agreement to spread tax payments over time. If gaining more time to pay will not be helpful because your liability is more than your income and assets can handle, even with having more time to pay, you can request an offer in compromise. If the IRS agrees, you can settle your outstanding tax bill for less than the full amount owed.
Members of the armed forces are taxpayers, even while service on duty. However, they enjoy a number of special tax breaks, including tax-free income as well as extended deadlines for filing tax returns and taking other actions.
