Accountant Tax Tip

Electronic Payment Options

The Electronic Federal Tax Payment System allows for both individuals and businesses to make tax payments from a checking or savings account online via a secure government site.  One of the advantages of such a system is that you don't have to worry about your payment getting lost in the mail.  In 2005, a delivery truck containing 30,000 tax payments crashed off a bridge into a waterway.  All payments were lost.  Although the IRS did not charge penalty and interest for those payments, people had to worry if their payment vouchers (which contain social security numbers, names, and addresses) were going to wash up and end up in the wrong hands.

Another benefit of the electronic payment option is that it allows you to set your payment to be delivered on a specific date.  You can wait to pay until close to the due date without risking forgetting to make the payment and incurring penalty and interest charges.  The government currently does not require use of the EFTPS, but as you will see below they are heading in the direction of requiring more and more electronic interactions.