NOV 16, 2021
EFTPS ONLINE: A GUIDE FOR PAYING BUSINESS TAXES & AVOIDING FINES
Tax procedures can be overwhelming for a new small business owner. Learn the basics of the EFTPS online system, so you can avoid costly fines.
WHAT IS EFTPS?
The Electronic Federal Tax Payment System, or EFTPS, is a free tool provided by the U.S. Department of the Treasury that processes secure tax payments online via direct debits. It can be used by individuals, businesses, nonprofits and other government organizations. EFTPS is a convenient tool for making payments to the IRS, particularly because it’s available year-round, 24-hours a day.
The main difference between EFTPS and the IRS’s other electronic payment tool, Direct Pay, is that both individuals and business owners may pay federal taxes through EFTPS, while Direct Pay is only accessible to individuals. And unlike Direct Pay, which caps money transfers at $10 million, there is no limit to the amount of money that can be sent through EFTPS.
EFTPS is designed for both businesses and individuals who want a secure way to pay their federal taxes. Users can pay estimated, corporate, self-employment, and payroll taxes through the system at any time.
NAVIGATING EFTPS ONLINE
To enroll in EFTPS online, you will need to visit the official site and submit the following information: employer or taxpayer identification number business name and address, contact information, and bank account and routing number. The approval process takes seven to ten days, upon which time you will receive a PIN that will allow you to create an online account with a username and password of your choosing. From there, you can start scheduling payments.
The payment process through EFTPS is straightforward enough. Log onto the site, select the “make a payment” option on the screen, and follow the instructions and prompts. Payments may be scheduled up to 365 days ahead of time by choosing a specific date for money to be transferred. Changes and cancellations may be made up to two days prior to scheduled payment.
Once a transaction is complete, users receive a receipt with a confirmation number. EFTPS also utilizes an email alert system to keep individuals posted on upcoming payments, as well as tracking up to 15 months of previous payment history.
While the user interface of EHTPS is simple and convenient, business owners and individual are on their own in terms of understanding the intricacies of tax law, payment deadlines, and more.
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