The Electronic Federal Tax Payment System (EFTPS) is offered for free from the Internal Revenue Service (IRS) and Financial Management Service (FMS). The system moves tax payment information and funds electronically through the Automated Clearing House (ACH) Network. The IRS cites numerous advantages to using EFTPS: It's fast, economical, easy-to-use, accurate, and flexible. Currently, over 3.5 million taxpayers use the system.
There are two primary payment methods, EFTPS-Direct and EFTPS-Through a Financial Institution. EFTPS-Direct is more flexible, with three interchangeable payment methods: EFTPS-OnLine (Internet), EFTPS-PC (Personal Computer) Software, and EFTPS-Phone. Payments can be initiated electronically 24 hours a day, seven days a week.
EFTPS-Through a Financial Institution allows a financial institution to electronically move funds to make tax payments.
Both payment methods allow businesses to schedule payments up to 120 days in advance of the due date; individuals can schedule payments up to 365 days in advance of the due date. EFTPS will make the payment on the due date indicated, unless otherwise indicated up to two days before the due date. Confirmation of payment is available within 48 hours.
Because the payments are made electronically and scheduled in advance, there are substantial savings in time and money. There is no need for envelopes, stamps, couriers, or last minute trips to the bank. Payments can be made in less than three minutes. The system also allows for verification of all information input, ensuring accuracy of the electronic payment. It can be used to make payments of Federal income, estimated, estate and gift, employment, and excise taxes. EFTPS can also be used to make installment agreement payments. --Article courtesy of IRS Taxpayer Education & Communication Branch.
