There’s good news for taxpayers when it comes to federal tax payments.As of January, 2011, IRS regulations require all Federal taxes to be paid electronically, and the EFTPS tax payment service is the tool used to submit tax payments electronically to the IRS. Employers outsourcing payroll services to a vendor that figures and pays federal taxes on their behalf often wonder if their taxes are actually being handled correctly. Up until now, most have relied simply on an absence of tax notices from the IRS to confirm their questions, but EFTPS is now sending PINs to employers so that they can access EFTPS at any time. This EFTPS pin is useful for several reasons, including making it easier to view history, pay federal taxes on time and avoid late fees and penalties.
EFTPS and Outsourcing Payroll Services
When outsourcing payroll, the vendor should be paying all of the business’s Federal taxes electronically, according to IRS regulations. In order to do so, the payroll service must register (or enroll) the business in the EFPTS system. Now in 2014, when the vendor enrolls a company in the EFTPS system, the IRS automatically sends a PIN number to the business for their own use. This allows you to see the status of your federal tax payments at any time.
Why Use Your EFTPS PIN?
For those companies that are not outsourcing payroll, EFTPS is a key tool to ensure payments are submitted electronically as required. When making payments, a taxpayer can schedule them up to eight hours before the final due date. According to the IRS, taxpayers can file and pay online confidently with their PIN, as firewalls and security policies on the website guard against any intrusions and a three-step authentication process is required for every user.
If outsourcing payroll services, the most common way to use an EFTPS PIN is to check on the current status and history of tax payments. Even if a business trusts their payroll vendor completely, it’s a good business practice to log in and check on the payments from time to time.
Enrolling in EFTPS is easy at eftps.gov. Once contact information is filled out, instructions guide taxpayers through the remainder of the process. Find resources to help you understand the process at eftps.gov including a quick guide to enrolling, a financial institution handbook, a glossary of terms related to EFTPS and an EFTPS Fact Sheet.
The EFTPS site has also been improved, eliminating defaults for tax periods and allowing users to select their own settlement dates. Calendars have been added to simplify transaction searches and select dates. The website also has worksheets and instructions to help with any process associated with using the PIN. It’s easier than ever to keep track of federal tax due dates and payment processes, whether you are making them yourself or having someone do it for you.
Where to Find Information
Find information about how the EFTPS PIN process works, including how to use EFTPS, FAQs about EFTPS, privacy information and enrollment information here. Enrollment, security and scheduling payments is also addressed in IRS Publication 966 “Electronic Federal Tax Payment System, A Guide to Getting Started.”