… and some special instructions for those who owe $1 or less or $1 million or more.
Since most of us e-file our taxes, it's only natural that when we owe, we pay Uncle Sam electronically, too.
But most is not all. Some folks still file paper returns. And some taxpayers who do e-file still prefer to pay with an old fashioned, handwritten paper check or money order.
That's OK with the Internal Revenue Service. It will take our money any way we want to deliver it.
But it does have some rules for paper payments.
Pay Treasury, not IRS: Make your check or money order payable to United States Treasury, not IRS. That's because the IRS is just the collector. The Treasury is the government's finance department. Also, if you write IRS on the pay to line, a crook who steals your tax mailing could more easily alter those three letters, for example putting periods after the I and R and making the S the start of a full surname, and fraudulently cash the check.
Include your info: Show your correct name, address, Social Security number, daytime phone number, and the tax year and form number (for most of us this time of year, that's Form 1040) on the front of your check or money order. If you are filing a joint return, enter the Social Security number shown first on your tax return.
The IRS even has a top on how to enter the amount you're paying. "To help us process your payment, enter the amount on the right side of the check like this: $XXX.XX," notes the Form 1040 instructions. Also don't use dashes or lines; for example, don't enter "$XXX–" or "$XXX xx/100."
Leave the check loose: Don't attach the payment to your return. Just drop it in the envelope. The IRS is going to rip it off anyway, as it deposits your payment before it processes the paper return you filed.
Use a payment voucher: If you're like most taxpayers, if you send a check with your 1040 filing, you just drop the financial paperwork in the envelope with your forms (following the prior tip). But the IRS actually recommends you also enclose a Form 1040-V payment voucher to help ensure your payment gets credited promptly.
Again, remember your check and return are separated once they reach the IRS. The voucher will help connect your payment to your return and IRS account.
Also, the voucher is handy if you file your return early, but don't send in the payment then. That's OK. You can send your 1040 and payment at different times. That happens most often when folks get an extension to file.
But there's no extension to pay. So get your check (and voucher) to the IRS by, this year, April 18.
The IRS also has a couple of things it wants you to know about your check payment.
Conversion to electronic payment: Despite paying with paper, your check ultimately will be an electronic transaction. The IRS says when you provide a check as payment, you authorize us either to use information from your check to make a one-time electronic fund transfer, or EFT, from your account or to process the payment as a check transaction.
That means there is no check float. For all y'all youngsters, back in the day, a check could take days or even a week to clear, giving you time to get money in your account to cover it.
Nowadays, when the IRS uses your check information to make an EFT, your payment amount may be withdrawn from your account as soon as the same day the agency receives your payment.
So make sure you have the money in your account. And note that the electronic conversion means you won't receive your check back from your financial institution.
Bad check fees: If your paper payment to the IRS bounces, the agency assesses a fee of $25 or 2 percent of the check, whichever is more.
And no, the IRS is not punishing just bad check writers. This penalty also applies to other forms of payment where the IRS doesn't receive the funds, such as a credit card that can't cover your tax bill.
Finally, there are special considerations for folks who owe very little or a whole lot.
< $1 = no payment required: As the IRS tip snipped from Publication 17 (and shown below) notes, you don't have to pay Uncle Sam if the tax amount you owe is less than one dollar.
Limit on $100 million checks: If, however, your tax due is ginormous, you are going to have to write more than one check. The IRS will not accept checks of $100 million or more.
No kidding. That's the notice, this time snipped from the Form 1040 instructions, to the left. If you're reading this on a small mobile device, here's the text:
No checks of $100 million or more: The IRS can't accept a single check (including a cashier's check) for amounts of $100,000,000 ($100 million) or more. If you are sending $100 million or more by check, you'll need to spread the payment over two or more checks with each check made out for an amount less than $100 million. This limit doesn't apply to other methods of payment (such as electronic payments). Please consider a method of payment other than check if the amount of the payment is over $100 million.
May I add my own tip, uh, request?
If you made enough money to owe more than $100 million, I'd love to meet you over coffee. Your treat, of course!
You also might find these items of interest:
- Important tax dates in 2023
- 6 ways to e-pay your federal tax bill
- Tax statements you need to file your 2022 return
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Marcia Smith
By bank shows payment was made but IRS says it is not paid
The check has cleared at my bank. I can see the deduction to my account
What can I do
Kay
Your first step is to get a copy of the canceled check, showing both sides, notably that it was endorsed by the federal government. Then call the IRS and tell them you have the proof in hand that your payment was cashed.