Tax Liabilities: 3 Methods Outlining How to Pay the IRS

How to pay the IRS so that you are minimizing your tax liabilities.

If, after filing your business tax return, you learn that you are subject to some tax liabilities and still need to pay the IRS more in taxes, don’t fret. Listed below are three different methods that allow you to easily pay what you owe on time and minimize your tax liabilities.

Electronic Federal Tax Payment System

Electronic Federal Tax Payment System (EFTPS) is a system of paying federal taxes electronically using the Internet. To be able to use EFTPS, taxpayers must enroll in the system. Upon enrollment, taxpayers enter their business information. This includes contact information and details of the financial institution where the funds are withdrawn from. Taxpayers will receive an EFTPS PIN to use along with the EIN and password during log in. EFTPS accepts all types of federal tax payments, including income, employment, and estimated and excise taxes, acting as an optimal gateway for taxpayers to stay tax-compliant and limit their tax liabilities.

Electronic Funds Withdrawal

Electronic funds withdrawal (EFW) is an integrated e-file or e-pay option. This is an option that is only available when filing your business’s federal taxes using a preparation software or through a tax professional. Under this option, taxpayers allow the IRS to transfer funds from their account to the Treasury’s account. This method requires taxpayers’ banking information, such as the bank name, account number, routing number, and account type. When e-filing the tax return, the tax preparer submits the information needed for EFW. The taxpayer can expect their funds to be withdrawn on the date on which the EFW form specifies.

International Wire Transfer

An international wire transfer is a great option for international taxpayers who don’t have a US bank account. This allows the user to transfer funds directly from their foreign bank to the Treasury’s account. With the international wire transfer option, international taxpayers can ensure that their taxes are paid on time and they’re not subject to any tax liabilities.

Taxpayers using this option should complete the Same-Day Taxpayer Payment Worksheet with the proper tax type code and tax period. They then must bring it to their bank for processing. The tax period and tax type code are important so that the IRS will be able to apply the payment to the correct IRS tax liability.

Please note that to be effective, the foreign bank must have a banking relationship with a U.S. Bank. While this is available for anyone with a foreign bank account, it is not recommended since it is costly compared to other options.

Other options available are IRS Direct Pay, IRS2Go, and pay by debit or credit card, but these options are not available for payments of tax due on Form 1120 US Corporation Income Tax Return.

Can Cleer Help Me Pay Taxes on Time and Minimize Tax Liabilities?

Yes! At Cleer Tax, our dedicated team is committed to addressing the unique tax and accounting needs of your business. We provide comprehensive tax advisory services tailored to your specific needs, covering every aspect of compliance and optimization. Our mission here at Cleer Tax is to ensure that your business seizes every available opportunity, leaving no stone unturned when maximizing your tax benefits and minimizing any potential tax liabilities.

Cleer offers Corporate Income Tax Packages inclusive of federal and state income tax filings for a hassle-free experience. Our comprehensive new company package offers tax consultation, bookkeeping, and a chart of accounts set up for a seamless start to your new venture. We also offer all-in-one monthly accounting packages, which include your monthly statements plus your federal and state tax returns. All of Cleer’s packages are designed to set up your business for success and keep any tax liabilities at a minimum. 

If you have any questions about your business’s specific tax obligations or other filing requirements, schedule a consultation to discuss them further. You may also email Customer Success at hello@cleer.tax.

Author Bio
David McKeegan
David McKeegan, the founder of Cleer.Tax is both an MBA and Enrolled Agent. As an entrepreneur and small business owner himself, he really understands the pain points that company owners and founders have in regards to tax compliance and having clean financial statements. What really differentiates David is his ability to distill complicated tax matters into layman’s terms, making the advice actionable and accessible to all.
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