Why do they ask the way & date I'm paying?

Question

Hello;

I filed using Freetaxusa this year as a first time electronic filer, & it was much better than paper filing. I appreciated the clear questions etc. which was like having someone help with the taxes through the entire process. One question that I had though was I chose file now, & pay later. Then I put the way I'd pay, & also the date I'd pay as I was prompted for that. The question is how does that work? Why do they ask that? I stuck to what I said but could I have paid another way or on another date, as long as it was before the due date? Thanks for any input;

Sondrum

Henry · Answer

https://community.freetaxusa.com/discussion/comment/1505#Comment_1505

I hope I can help to clarify things. When you prepare your tax return with us and you owe additional taxes, you have the option to pay when you e-file or to pay later.

1) If you pay when you e-file, you can either submit a direct debit payment with your tax return and have the money taken out of your bank account OR you can schedule a credit card payment. These scheduled payments by direct debit or credit card are what RyanZ referred to above.

When you choose to pay with your e-file submission, your payment information is transmitted to the IRS with your tax return, and the IRS will process your payment on the date that you select. You can choose to have the payment processed as soon as the IRS receives your return or you can choose to have the payment processed at a later date. There is no penalty for choosing a later date, as long as that date is before the filing deadline.

2) If you decide NOT to pay when you e-file and indicate that you prefer to pay later, then it is up to you to submit your payment to the IRS. No payment information will be submitted by us.

When you choose to pay later, you can opt to pay by credit card (through a third party), mail in a payment with a payment voucher, pay using your IRS online account (through the IRS website), or pay using Direct Pay (through the IRS website).

With each of these options, you need to make the payment on your own later. We give you the information you need at the end of the Final Steps menu in order to complete your payment, but it is up to you to make sure the payment actually gets submitted and processed on time. This means that if you plan for a specific payment date and miss that date, then you need to follow up and submit a payment on a different date. As long as the payment is made prior to the filing deadline, you should be good to go.

um.SonDr · Answer

https://community.freetaxusa.com/discussion/comment/1504#Comment_1504

Ok, it sounds like submitting electronically, & choosing pay later requires you to set up a payment method & date, whether it's through your electronic preparer or the IRS. I guess that make sense looking at it now. I had thought why not be able to pay in the method & date, ( as long as before the tax was due), that works for you later? Anyway, I submitted the tax on the 3-9-24, & wanted to set the payment date where there was plenty of time for them to accept it, so I set the payment date as 3-12-24, with online payment type. I did do the online payment 3-12-24, but what if I would of missed it. Don't I still have until when the tax is do, or I can only pay the date that I registered. Just trying to fully understand this.  Thanks for any additional input.

RyanZ · Answer

Hello sondrum and welcome to the FreeTaxUSA Community!

The way that file now & pay later works, is that a payment transaction is created for the date and amount that you select.  This payment transaction is transmitted with your federal tax return and the IRS system won't initiate your payment until the date that you selected.

The file now & pay later is commonly used by taxpayers who know that they owe taxes, but want to wait until the due date.  This allows them to file the tax return now so that it can be DONE, and benefit from paying later.

If you don't want to schedule your tax payment through FreeTaxUSA, you may choose to schedule your tax payment directly with the IRS at

https://www.irs.gov/payments

.