Depending on your tax situation, you may be one of the many Americans who make estimated tax payments. In years past you may have mailed a physical check directly to the IRS or your state's tax office. However, right now that may not be the best method. Between delays with the mail and the IRS extremely backed up with paperwork, there is a risk that they may not get to your mail for months. To make matters more confusing for taxpayers, the IRS recently closed some P.O. boxes that have been used for years, and is no longer accepting any mail at those locations. Here's what you should know about making estimated tax payments in 2020.
Making Payments Electronically:
To ensure that your payments are made in a timely fashion, and they don't literally get lost in the mail, it is advisable to make your payments electronically through the appropriate government website. The IRS has this functionality directly on their website, and many states offer this option as well. You will either need to register online to make an account or answer some questions about yourself in order for the government to apply your payment correctly. They will ask for your bank information and pull the requested amount directly from your bank account. Below, we've linked some of the more common online tax payment websites that we direct our clients to. If you don't see your state below, and you need to make an estimated payment, Googling "[Your State] online estimated tax payment" will usually yield the correct website to make a payment.
Making Mail Payments:
Although we encourage making online payments right now, if this is not a viable option for you, you can still make payments through the mail. However, be careful and make sure you are making the payment to the right place. While you may have been making payments to the same location for years, or may even have an address referenced on an estimated payment voucher you already have, there is a possibility that the mailing location has changed. Depending on your state, and the form being sent in, there will be a certain location the IRS requests the documents mailed to. We encourage you to double check the IRS website to make sure your payment is being sent to the correct location. Otherwise you may find the mail returned back to you, possibly months later.
Tax payment mailings are a little more complicated this year. With possibly long delays of mail even being processed, we strongly encourage those who do need to make payments to make them electronically. It may be months before you even find out if there was an issue. If you need assistance with your own tax planning, or your financial planning in general, we encourage you to reach out to our team.