Paying Your Business Taxes Can Be Easier
by JimD, Former Moderator
- Created: August 5, 2010, 7:53 am
Stop fusing with mailing deposit coupons and all the IRS forms. You can simplify your tax process by using the U.S. Department of the Treasur;s Electronic Federal Tax Payment System. This is a free service offered to anyone paying federal taxes. You can create an account for your business or yourself and then submit payments online or over the phone directly from your checking or savings account.
Is it secure and reliable?
EFTPS offers the highest levels of security available. Firewalls and implemented security policies ensure that you and only you can make, cancel, and inquire about your tax payments.
The system is available 24 hours a day, 7 days a week by phone or online. Remember, if the EFTPS online system goes down, you are still required to make your tax payment. The EFTPS Voice Response System will still be available for you to make your payment.
Is there a cost to use EFTPS?
No. This is a free service offered by the U.S. Department of the Treasury to help businesses and individual taxpayers conveniently pay all their federal taxes electronically.
Who can use EFTPS?
Anyone can use EFTPS to pay their federal taxes. This includes individuals as well as businesses.
You are required to use EFTPS if you have a business with more than $200,000 of federal tax liability. If you fall into this category, you should receive a notice by mail from the IRS, beginning the second succeeding calendar year after hitting the $200,000 threshold. Federal Tax liability includes employment taxes, Social Security taxes, and various other type of non-payroll withholding. If you are required to use EFTPS, but choose not to, a 10% penalty will be applied.
Why should I use EFTPS?
Using EFTPS is convenient and easy. The system is available 24 hours a day, 7 days a week by phone or online. You can schedule business payments up to 120 days in advance and individual payments 365 days, saving you time.
Can I pay my state taxes with my federal taxes?
No. EFTPS is for federal taxes only. You can check with your state to see if they have a similar system for paying state taxes. Pennsylvania has a system call e-TIDES, Electronic Tax Information and Data Exchange System. This allows you to pay a variety of taxes, such as Sales Tax, Employee Withholdings, and Corporation Taxes. For more information on paying your taxes on a state level, visit your stat-s department of revenue or tax portal.
Do I need special software?
Using EFTPS does not require any additional software to be downloaded. It is all done through their website. As of July 2010, your browser must be upgraded to either Microsoft Internet Explorer 7.0 or higher or Firefox 3.5 or higher to access the system.
How do I sign up?
To sign up to use EFTPS, you will need to enroll on the EFTPS website. It is a simple 4 step process.
- Step 1: You will need to read and accept a Privacy Act and Paperwork Reduction Act as well as pick how you would like to enroll, as a Business or Individual.
- Step 2: You will enter your EIN (for businesses) or SSN (for individuals) and contact information. You can also setup a checking or savings account to make payments. Having these numbers ready will make the process faster.
- Step 3: Review all the information
- Step 4: Complete Enrollment
After you have completed the enrollment, you should receive a PIN numbers and instructions for obtaining a password by mail within 7 business days.
No matter the amount of federal taxes you owe, EFTPS can make it easy and convenient to pay your individual or business taxes.
- EFTPS Official Website
- IRS article on EFTPS
- Making Estimated Tax Payments- A 101 for the Small Business Owner
- A Primer in Taxable Business Income
- When does a Business Start Paying Taxes? A 101 in Small Business Tax Requirements
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