Many of us have gotten comfortable with paying our monthly bills online, so it is surprising that, in our practice, we see very few clients electronically making their quarterly estimated tax payments. It is very easy to do so, and every bit as secure as paying your credit card or electric bill. Recently the IRS rolled out the new Direct Pay service for individuals to make their quarterly estimated tax payments. This service can also be used to pay an individual tax bill, but is available only for taxpayers who use a Social Security Number (SSN) rather than a Taxpayer Identification Number (TIN). For more information, including plans for enhancements to Direct Pay, click here:
To sign up, follow this link:
Of course, electronic payment of federal estimated income taxes through the Electronic Federal Tax Payment System (EFTPS) has been available for quite a while. The service is free and you can pay by phone as well as by using the Internet. Additionally, the service is available for payment of all federal taxes, not just quarterly estimated taxes. EFTPS can also be used for paying business taxes.
With EFTPS, you can schedule payments up to 365 days in advance and access up to 16 months of payment history. The system is secure and includes verification steps which allow taxpayers to review their information before it is sent. EFTPS is available 24 hours a day, 7 days a week, whether you are making payments by Internet or phone.
For a complete description of the EFTPS and to enroll, click on this link:
Currently in Virginia, there is no system equivalent to the federal Direct Pay system, but taxpayers can access VATAX Online for payment of taxes. VATAX Online offers many of the same features as EFTPS and divides its services between individuals and businesses.
For individuals, information can be found here:
For businesses, information can be found here:
Electronic payment of some business taxes is already required and it is possible that more taxes, including individual taxes, will require electronic payment in the future, so why not get started?