Uncle Sam’s next big payday is Monday, Sept. 15.
That’s when he collects money from folks making estimated tax payments.
It’s one of the four extra tax filings required of taxpayers who get income that isn’t subject to withholding. As part of our pay-as-you-earn system, the Internal Revenue Service expects us to send in our taxes on this money — independent contractor and investment earnings, prizes and gambling jackpots and the like — using Form 1040-ES.
The IRS, however, is encouraging us to dispense with the paper 1040-ES forms and instead pay electronically.
Another e-payment option
To get more money transferred directly, the IRS has created a new e-payment method that’s become pretty popular.
Earlier this year, the IRS introduced Direct Pay, an online payment option where you can have tax payments made directly from your checking or savings account.
Yes, the IRS already has the Electronic Federal Tax Payment System, or EFTPS, for this. Direct Pay, however, doesn’t require you to set up an account and wait for a PIN.
Instead, just go to the Direct Pay page on IRS.gov and voila! You will need to provide the IRS some information so it can confirm you are who you say you are. So dig out your prior year tax returns; you can choose one of the last five years for identity verification, although most folks will probably use the most recently filed tax return.
Then enter how much you want to pay and your bank information. Review it and electronically sign the transaction. Print or otherwise record the confirmation number you’ll get as soon as you hit send.
Direct Pay benefits
If you’re worried about giving Uncle Sam your bank account number, the IRS says you shouldn’t be. It won’t keep that data in its files after it gets your payment.
Plus, if you write a paper check, that account is there for every IRS worker who handles it during processing to see.
The Direct Pay option is free and you can schedule your payments up to 30 days in advance. Just remember to have the money in the bank on the payment day! Yes, e-payments can bounce as high as old-fashioned rubber checks.
The IRS says that so far this year it has collected more than $1.7 billion in taxes via more than one million Direct Pay transactions.
If you want to join this growing e-payment group, the impending Sept. 15 estimated tax payment deadline is as good a time as any to start.
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Veteran contributing editor Kay Bell is the author of the book “The Truth About Paying Fewer Taxes” and co-author of the e-book “Future Millionaires’ Guidebook.”