Question

E-Filing and Paying Balance Due

Forum|Forum|2 years ago
October 15, 2023
2 replies
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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.

N

NCPERSON1

@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.

M

MaxRLCAuthor

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?

Critter-3

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.

rjs

Employee

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.

M

MaxRLCAuthor

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.