What Is an Income Tax Electronic Filing System?
The IRS has been working to get as many individuals as possible to file and pay taxes electronically since electronic filing started in 1990. Electronic Filing saves the IRS millions of dollars a year in man-hours to manually process each return.
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The Electronic Federal Tax Payment System
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The Electronic Federal Tax Payment System, also known as the EFTPS, has been around since the IRS began accepting e-filed returns. It is a website that allows individuals and businesses to e-file and pay taxes online through eftps.com.
Registration
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Prior to using the EFTPS, one must register on the website as an individual to pay income tax and as a business to pay payroll, unemployment and estimated taxes. The registration requires entry of the specific personal and business identification numbers, bank and payment information. The process takes about three business days for the registration to be accepted by the IRS.
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Enrollment
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Once individuals or businesses have registered, they must enroll to use the online system. Registering allows the user to enter all personal and banking information for payments, while enrolling assigns a Personal Identification Number that identifies the individual or business to the IRS and allows the return to be filed and paid through the EFTPS website. It can take two or three business days to receive the PIN.
Personal Tax Payment
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Most individuals who use the EFTPS website are self-employed, but it is not limited to those taxpayers. Individuals also may pay estimated taxes that may not be taken out of their payroll checks.
Schedule Payments in Advance
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EFTPS gives users the option of paying taxes in advance. EFTPS gives users the option of paying estimated taxes in advance from the designated checking or savings account used during registration. Setting this money aside in this way can help reduce the shock of a large payment at the end of the year.
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References
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