J. William Seabrooke CPA P.C.

Virtually all of the Federal and State taxing authorities want to make it just as easy as possible for you to pay your taxes.  You may remember many years ago when there was the multi-use Federal Tax Deposit coupon (Form 8109).  It was about the size of a standard check, could be used for different tax deposits, but the deposit itself had to be made in a Federal depository bank. Over the past 15 years major improvements have been provided to taxpayers everywhere – choose your “weapon”!  You have the option to pay using:

1)  Electronic withdrawal from your bank account

2)  Your telephone

3)  Either your debit or credit card

4)  A personal check and the U.S. Postal System, or

5)  The Electronic Federal Tax Payment System (EFTPS)

This FREE system began in 1996. If you’re not familiar with the EFTPS, you can obtain more information at this website:  http://eftps.gov  There’s information on how to enroll, how to make payments, payment records that are available to both the business owner and to individual taxpayers, and the Frequently Asked Questions (FAQs) via this link:  https://www.eftps.gov/eftps/direct/FAQGeneral.page.  You can even enroll on line!  This is an encrypted, secure website. 

Payments must be scheduled at least one calendar day prior to the tax due date by 8:00 p.m. ET. Your payment instruction will be executed on the date you selected, and your records will be updated at the IRS.  There is an advantage here for improving either your personal or business cash flow.  You retain your cash or working capital until the due date for the deposit or the date that you select for your payment(s).  If you are uncomfortable with the Federal or state government having access to your bank account, open a separate or special account just for your tax payments.  Most banks and financial institutions do not impose additional charges for these accounts.  Here is additional information on this subject: 

    Top Ten Things About Making Federal Tax Payments  

Will you be making a payment with your federal tax return this year? If so, here are 10 important things the IRS wants you to know about making tax payments correctly.

1. Never send cash!
2. If you file electronically, you can file and pay in a single step by authorizing an electronic funds withdrawal via tax preparation software or a tax professional.
3. Whether you file a paper return or electronically, you can pay by phone or online using a credit or debit card.
4. Electronic payment options provide an alternative to paying taxes or user fees by check or money order. You can make payments 24 hours a day, seven days a week. Visit IRS.gov and search e-pay, or refer to Publication 3611, e-File Electronic Payments for more details.
5. If you itemize, you may be able to deduct the convenience fee charged for paying individual income taxes with a credit or debit card as a miscellaneous itemized deduction on Form 1040, Schedule A, Itemized Deductions. The deduction is subject to the 2 percent limit.
6. Enclose your payment with your return but do not staple it to the form.
7. If you pay by check or money order, make sure it is payable to the “United States Treasury.”
8. Always provide your correct name, address, Social Security number listed first on the tax form, daytime telephone number, tax year and form number on the front of your check or money order.
9. Complete and include Form 1040-V, Payment Voucher, when sending your payment to the IRS. This will help the IRS process your payment accurately and efficiently.
10. For more information, call 800-829-4477 for TeleTax Topic 158, Ensuring Proper Credit of Payments. You can also find out more in Publication 17, Your Federal Income Tax and Form 1040-V, both available at IRS.gov.

Links:

• Electronic Payment Options
• Form 1040-V, Payment Voucher (PDF 47K)
• Form 1040-ES, Estimated Tax for Individuals (PDF 294.9K)
• Publication 17, Your Federal Income Tax (PDF 2,072K)