April 1, 2013

Electronic Payment Options

Electronic Payment OptionsOur clients often ask about alternative methods of making tax payments in lieu of mailing in a physical check. As we approach the April 15th tax filing deadline, we wanted to provide a summary of electronic payment options available to make tax payments electronically.

Federal Payments: https://www.eftps.gov/eftps

The Electronic Federal Tax Payment System (EFTPS) is an optional service provided by the US Treasury, which allows you to pay your federal taxes electronically or via phone. The online account takes a few minutes to set up, requiring some basic personal and banking information.  However, for security purposes after the initial set up is complete you will receive a PIN number in the mail which takes 7-10 days to receive in order to access the account.  Once you gain access you can make payments via the web or by phone.  All federal taxes due to the IRS can be paid using the EFTPS system.

California Payments: https://www.ftb.ca.gov/online/webpay/index.asp

California uses the Web Pay system to facilitate electronic payments. California requires that taxpayers make their payments via the Web Pay system once they:

1.) Make an estimated tax or extension payment (by check or electronic method) over $20,000 for a taxable year beginning on or after January 1, 2009; OR

2.) File an original return with a tax liability over $80,000 for a taxable year beginning on or after January 1, 2009.

Once payment has been made using Web Pay all future payments must be made using the Web Pay service.  All that is required to make electronic payments is some basic personal and banking information.  No account creation or registration is required.  Payment must be made from a valid checking or savings account.  At this time only individual and businesses may make payments through the Web Pay system.

Credit Cards:

Payments can also be made via credit cards but the third party processors will charge anywhere from 1.89%-2.35% depending on the service you use.  If your main incentive to make your tax payments via credit card is for reward points, we recommend that you check with your credit card provider to see if payments for tax liabilities count towards reward points. You can find a list of recommended services here:

Federal: http://www.irs.gov/uac/Pay-Taxes-by-Credit-or-Debit-Card
California: https://www.ftb.ca.gov/online/CCard.shtm

If you would like assistance in making payments electronically please let us know, we would be happy to help.