If you’re self-employed, then you are probably familiar with estimated taxes. Every year, people who are self-employed have to calculate how much they expect to earn for the year, and then figure out what the taxes would be for that amount of income. The resulting estimated taxes are paid to the IRS on a quarterly basis.
What you might not know is that there are several ways for you to pay the IRS:
On the internet
There are three ways to pay your estimated taxes online:
1. The IRS accepts direct payments on their website. You can visit their website when you’re ready to make your quarterly payment and choose to pay by credit or debit card, or through an automatic withdrawal from your bank account. There is a charge for paying with a credit or debit card. Payments can be scheduled up to 30 days in advance.
2. You can make an Electronic Funds Withdrawal (EFW) payment when you e-file your regular tax return. It is a convenient way to pay your estimated taxes because you can set up all four of your payments at once with an EFW. Most other methods don’t allow you to make a payment more than 30 days in advance. The problem is that you can only do this when you e-file.
3. The Electronic Federal Tax Payment System (EFTPS) allows you to pay your taxes online throughout the year. As with the EFW system, you can schedule all of your payments in advance. It can take up to five days for them to process your enrollment, but the service is entirely free.
You can send a check or money order to the IRS through the mail. All of your identifying information has to be on the check or money order to make sure that they credit your account. This method is not the most secure way to pay your bill.
Pay cash in person
For a small fee, you can make a cash payment in person at one of the IRS’s retail partners. You would have to arrange the payment with the IRS first. They will verify your information and pass it on to their retail partner. Once they confirm your identity, you will receive an email confirmation from the retailer to let you know that you can come to their shop to make your payment. The entire process will take a few days.
You can call EFTPS to make a payment. The service is free, and you can schedule your payments in advance as with the online system.
Foster Financial has years of experience in providing professional accounting services to its clients. If you need help with your estimated taxes or with any of your accounting needs, feel free to contact us.