It's less than a month until the second estimated tax payment deadline. If you want to make that payment electronically via the IRS' Electronic Federal Tax Payment System, or EFTPS, then you need to sign up now.
I've been using EFTPS for the last few years to make, when necessary, regular annual 1040 tax-due payments. But it's really come in handy for my 1040ES estimated tax obligations.
Once you're set up, you can schedule all four estimated payments — if, like mine, they are all the same amount — in just one session. Then you're done with them for the year.
All you have to do is make sure you have the money in your account when each payment date — April 15, June 15, Sept. 15 and Jan. 1 of the next year — rolls around.
The one downside of EFTPS is that it does take a couple of weeks to set up your account.
Although the IRS is doing its darndest to go as electronic as possible and get us taxpayers to do the same, when you sign up for this payment system, the agency still mails you a paper letter with your EFTPS personal identification number. You need that number to use the account. And it could takes up to 14 days for it to arrive.
So if you want to switch to EFTPS, either to make your June 15 estimated tax payment or for future financial dealings with the IRS, sign up now while you have plenty of time.
More scheduling issues: Once your account is established, then you just sign on when you want to schedule payments.
Now about scheduling those payments, here's one other timing warning.
Like most other bank transactions, the money transfer to Uncle Sam isn't immediate. It's fast, but banks tend to like a little lead time. For example, when I pay bills online, the soonest delivery date my bank's payment system will allow is the next day, and that's if I enter the payment request during regular banking business hours.
So to ensure that your payment gets to the U.S. Treasury in time, don't sign on the day the payment is due and expect it to get there within minutes. Give yourself a couple of days lead time.
When I have to pay the IRS, I go to my EFTPS account three or so days early just to make sure that I can have the payment made in time to avoid late payment penalties.
And I'll be back in early June to remind you of the impending 1040ES payment date.
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Eva L
Have you heard of any security or identity theft problems with EFTPS? I gave EFTPS a try and found it pretty risky. It seems to rely on the security of postal mail, which, in a big city, is nonexistent.
When I went to the EFTPS website to enroll I entered my SSN, my address, and my bank account & routing number. The website said I would receive an enrollment letter. 10 days later I did, and it was opened! Either it was never sealed, or it was opened before I found it in my mailbox. The letter contained an account number and a PIN, with which anyone with my SSN can log in to my EFTPS account and get my bank account into. Of course, who could possibly have my SSN? I dunno, maybe the same person who opened the EFPTS letter…
So I logged on EFTPS to try to change the PIN. The website says you can’t change a PIN, but you can delete it if you call a number. I called the number and was told that the PIN would be deleted when the EFTPS received written instructions from me to cancel the enrollment.
So I’m going to send in the instructions to cancel, but I’m a little disinclined to re-enroll. I think I’ll stick with paying by check.