Business taxpayers who remit payroll taxes know about the mandatory use of the EFTPS, the Electronic Federal Tax Payment System, but individual taxpayers also are eligible to use the system as well!
Taxpayers who are required to make estimated tax payments may enroll in the EFTPS program to make their payments. The enrollment process is simple, and requires the taxpayer’s identifying information as well as checking and routing number. Taxpayers can then schedule payments up to 12 months in advance.
This system works wonders for taxpayers who find it inconvenient to remember the estimated tax deadlines (April 15, June 15, September 15, and January 15), or who wish to better match the period in which income is earned and the period in which tax is paid. This method also may help to smooth cash flow for those taxpayers who live on a budget.
The failure to make proper estimated tax payments may subject a taxpayer to a penalty of approximately 2.5% of the underpaid balance. Additionally, taxpayers who fail to plan appropriately may have balances due upon filing their taxes. The EFTPS is a great way for taxpayers to avoid penalties and headache!
For more information, contact our office or to enroll, go to www.eftps.gov. EFTPS is a free service of the US Department of the Treasury.