Did you know it is possible to schedule your estimated tax payments online? This is a very handy service for people who have to make Form 1040-ES estimated tax payments in April, June, September and January each year. To make your payments, use the Electronic Federal Tax Payment System (EFTPS®). The EFTPS® enables individuals and businesses to send their tax payments to the IRS by electronic transfer rather than writing a check and mailing it, or sending an expensive wire.
With the Electronic Federal Tax Payment System (EFTPS®), a free service of the U.S. Department of the Treasury, you schedule payments whenever you want, 24 hours a day, 7 days a week. You can enter payment instructions up to 365 days in advance. This way when your tax preparer completes your taxes and calculates next year’s estimated payments, you can login online and schedule those payments. Then you’re done. The nuisance of mailing in those payments by check every few months has been removed.
Reasons to use the service include:
- It’s fast. You can make a tax payment in minutes.
- It’s accurate. You review your information before it is sent.
- It’s convenient. You can make a payment from anywhere there’s an Internet or phone connection 24 hours a day, 7 days a week.
- It’s easy to use. A step-by-step process guides you through scheduling payments.
- It’s secure. Online payments require three unique pieces of information for authentication: an employer identification number (EIN) or social security number (SSN); a personal identification number (PIN); and an Internet password. Phone payments require your PIN as well as your EIN/SSN.
One thing to be aware of is that you can’t wait until the due date to make your first payment! Payments must be scheduled at least one calendar day before the tax due date by 8 p.m. ET to reach the Internal Revenue Service (IRS) on time. On the date you select, the funds will be moved to Treasury from your banking account, and your records will be updated at the IRS.
There are a couple of other items to consider. Obviously it is important you have the funds in the checking account you are transferring from. The first time you use the system, you will have to enroll. Also remember that the EFTPS® is a tax payment service. You’ll need to already know the amount, tax form, and date when you schedule a payment. This system doesn’t help you calculate your tax due. If you want to cancel a payment, you must do so by 8 p.m. local time two business days before the scheduled date.
For those of you that make estimated payments each year, I urge you to consider using this service. It will make your life a little easier.
For comments or questions, reach out on twitter: @iammrmarshall