Online Tax-Paying Options

In an effort to better connect with taxpayers, the Internal Revenue Service (IRS) has added online payment options to the usual ways for us to pay our taxes. Paying your taxes online integrates with their current electronic filing program. In 2004, more than 68 million taxpayers filed electronically, according to Bankrate.com.

Most people file electronically because they are due refunds, but now the IRS is offering ways to pay for the rest of us who might pay writing a check, according to Bankrate.com. Any of these options will surely be welcome come Monday, April 17th.


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Electronic Federal Tax Payment System (EFTPS) is a system usually used by businesses, but now the IRS is seeking to convince individual taxpayers to use the system as well. EFTPS is a free service open to those filing individually or using a paid preparer. According to the IRS, EFTPS is especially ideal for individual taxpayers making 1040 quarterly payments because of the scheduling feature of the system. You can pay up to 120 days ahead using EFTPS. Visit http://www.eftps.gov/ to enroll.

The IRS also offers a one-time Penalty Refund Program as incentive to get businesses to enroll in EFTPS. Read IRS Offers Penalty Refund for EFTPS Enrollment to find out more about this program.

IRS Publication 4132 is an online factsheet outlining EFTPS. IRS Publication 4276 offers help for new businesses enrolling in EFTPS.

Electronic Funds Withdrawal (EFW) is basically the reverse of direct deposit and a branch of EFTPS. The service is free for most filers and you can schedule your payment as long as it is before April 17th this year. To enroll, you must enter your financial institution’s routing number with your account number and know whether the account you enter is savings or checking. Visit http://www.eftps.gov/ to enroll.

Paying your taxes with a credit card may fit your immediate needs instead. Paper or electronic filers can use this option via the Internet or by phone. The IRS has two online sites, operated by private corporations, to receive your credit card payments. According to the IRS, two sites are provided to ensure that at least one site will be available at any time. All major cards are accepted at either web site. This service is not free and charges a fee that is generally 2.49 percent of your charged tax payment.

The IRS recommends that you print a copy of your receipt page and place it in your tax records. The receipt lists your:

  • Confirmation number
  • Payment Date
  • Payment Type
  • Tax Year
  • IRS Payment Amount
  • Convenience Fee Amount
  • Total Transaction Amount
  • Primary Social Security Number
  • Primary First Name
  • Primary Middle Initial
  • Primary Last Name
  • Primary Suffix (Jr, Sr, etc.)
  • Credit Card Type
  • Credit Card Number

You can pay a portion of your tax liability, but interest charges begin accruing on your unpaid tax liability if after April 17th. The two tax payment web sites are Pay1040.com operated by Link2Gov Corporation and OfficialPayments.com operated by the Official Payments Corporation.

In summary, there are several online payment options for individuals and businesses, for both business and individual filers. Also review IRS Publication 4169, Overview of EFTPS Programs for Tax Professionals.

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