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E-Filing and Paying Balance Due

Have chosen to mail tax returns until this year.   Considering e-filing, however, have the following questions/concerns:

 

* Balance will be owed. If tax return is mailed, would just include a check.  Because it takes several days for that check to clears, that provides sufficient time to deposit funds into the account from which the check will be written. 

* If the federal tax return is filed by the extended due date (October 16th), can I still choose the day that payment is debited from the bank account that is used to pay the tax balance due?    In other words, don't want the payment to draft the account the same or next day because cash need to be deposited into the account that is used to pay taxes.   

 

What is the best option?   Continue to mail and include a check?  Also, tax returns are always  mailed/sent "Certified" to prove delivery to the IRA.    But we have heard about the potential issues with IRS staff entering returns into the system; hence, E-Filing is recommended.

Help.

 

 

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10 Replies

E-Filing and Paying Balance Due

@MaxRLC as long as the envelope for a paper file is posted marked by 10.16 or efiled by 10.16, the IRS will give your payment credit as of the 16th, even if they process it later.  

 

Yes, because of the speed of efiling, there is less "bank float" and the payment is more likely to be debited quicker than if you mail.

 

However, don't be fooled by mailing,,,,,, that tax return goes to a bank lockbox and the bank is going to rip open the envelope the same day it is received and deposit the check - and then the paper goes to the IRS for processing.  So if you think you have weeks for the check to clear, that is not how it works.  the Banks have 24 hours from receipt of the envelope to deposit the check (I used to work for a large bank that processed these envelopes). 

 

I do not beleive the software will let you choose a debit date past the 16th.  if it does and you do choose a date past the 16th, then it will be late and there are late charges and interest that the IRS will bill you for.   

E-Filing and Paying Balance Due

Great reply - 

Yes, have noted the "float" time as approximately five (5) days before the check clears (that is, when I mailed the tax return) .

To clarify, if the federal tax return is E-Filed, payment date has to be the date the return is filed (i.e., October 16th).  What is the approximate "float" time in that situation if E-Filing?    24 hours?   36 hours?   Same day?   

 

E-Filing and Paying Balance Due

Make sure the money is in the account the moment you sign the check ... expect no float time.  And I highly recommend you pay online directly at www.IRS.gov/pay to get an instant reciept of the payment so the check doesn't get lost in the mail.  

E-Filing and Paying Balance Due

Thx for your reply. 

Need to clarify - 

 

If the return is E-Filed through Turbo Tax, are you suggesting to go directly to www.IRS.gov/pay?  In Turbo Tax, the question is asked, "How Do You Want to Pay Your Federal Taxes?".   The only options are to identify a bank account and direct debit or charge a credit card.   How do you E-File (with a balance due) and then leave Turbo Tax to pay at the IRS website?   Again, not understanding how you leave Turbo Tax and go to the IRS website to pay.........  

rjs
Level 15
Level 15

E-Filing and Paying Balance Due

There is no float time for paying by direct debit. It sometimes takes a couple of days after you file for the IRS to actually make the withdrawal, but you can't count on that. Make sure the money is in your bank account before you e-file the tax return.


Your payment was due April 18, not October 16. The extension is an extension of time to file your tax return, not to pay the tax. The IRS will send you a bill for interest and penalties for late filing. TurboTax cannot calculate the interest and penalties.

 

E-Filing and Paying Balance Due

You can say  you will mail a check then go online and pay  at the IRS.  It should give you the choice to mail a check.    Whether you efile or print and mail  your return.

E-Filing and Paying Balance Due

Yes - understand the April filing due date. 

Yes - understand is not an extension of time to pay. 

 

With best estimates,  the projected tax liability was calculated and in excess of 90% of the projected tax liability was remitted with the extension in April (including estimated payments). 

Now, the return for 2022 is due - 

 

Mailing and including a check provides sufficient float time to get available funds into the account being used to satisfy payment of the balance due.  Agree - funds should be in the account.  While it appears that no one can determine or identify the exact period of time when the payment would be drafted (direct debit), wanted to determine if anyone had any experience with E-Filing and specifying Direct Debit - that is, the amount of time before the IRS actually debits the bank account after E-Filing the tax return. 

 

E-Filing and Paying Balance Due

E-Filing and specifying that check will be mailed. 

Then, go to www.irs.gov/pay and remit online instead of mailing. 

 

Do you know how long it takes before the IRS recognizes the E-Filed return for 2022 (i.e., so that an online remitted payment will be processed correctly to the correct year)?

 

Thx in advance for your reply.

 

 

 

rjs
Level 15
Level 15

E-Filing and Paying Balance Due

When I filed my tax return in April I specified a direct debit date of April 14 and the debit was made on that date. If you file now with direct debit, you will be forced to specify the direct debit date as the date that you file, so you should be prepared for the debit to be made immediately.


If you pay online on the IRS web site (with Direct Pay) you specify the year that it's for. It does not depend on matching it up to your e-filed tax return.

 

E-Filing and Paying Balance Due

@MaxRLC what you have to understand is the whole concept of 'float' has changed over the past few years. 

 

even if you mail the check, that float ends the day the bank rips open the envelope.  Unlike the old days when that peice of paper had to physically travel back to your bank, it now all happens electronically.  So if you mail the check on Monday, don't be surprised if it clears as soon as Wednesday.  And it could even be Tuesday if you happen to live near where you are instructed to mail the tax return.

 

For the efiling, same thing: if you efile on the 16th that means the IRS has your banking information that same evening.  Figure they transmit the ACF file to all the banks on Tuesday evening and it will clear you bank as soon as Wednesday.,

 

So either way - figure two days MAXIMUM.  and there is a risk it could be one day.  Like I stated, the idea of 'bank float' isn't what it used to be.  

 

note I stated earlier I used to work for a very large US Bank, so I have an appreciate how this works from inside the Bank. 

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