The IRS wants to make it as easy as possible for you to send it your money. Its latest effort is an online payment service called Direct Pay. If you have to give the IRS your money, using Direct Pay can be a good way to do it. First of all, it’s free to use. The IRS also says it’s secure and bank account information is not retained in IRS systems after payments are made. You can use the service to pay your tax bill or make an estimated tax payment directly from your checking or savings account. The system is available 24 hour a day, seven days a week.
To use the system, go to the Direct Pay page on the IRS website (www.irs.gov/Payments/Direct-Pay). Using Direct Pay involves five steps: providing your tax information, verifying your identity, entering your payment information, and reviewing and electronically signing and recording your online confirmation. To verify your identity, the IRS uses information from one of your prior year tax returns. You can choose any return you filed within the last five years for verification purposes. Have a copy of the return ready when you use the system. You need to verify your identity this way each time you use Direct Pay.
You’ll receive an instant confirmation that your payment has been submitted along with a confirmation number. Be sure to print this out and save it for your records.
One nice feature included in the Direct Pay system is the ability to schedule payments up to 30 days in advance. You can also reschedule or cancel future payments. The system includes a payment lookup system you can use to see if your payment has been processed by the IRS. Payments ordinarily take two days to process.
Unfortunately, you can only submit one payment at a time using Direct Pay. Thus, you can’t use it to set up recurring payments, such as quarterly estimated tax payments.
So far, Direct Pay appears to be a big success. The IRS says that to date, more than 150,000 taxpayers have paid more than $340 million in taxes through the new system. The IRS has big plans for future improvements to the system, including an option for emailed payment confirmation, a Spanish language version, and one-time registration with a login and password to allow quick access on return visits.