Paying Taxes

There are several ways to pay taxes: By check, by transferring payment using the Electronic Federal Tax Payment System (EFTPS), or by charging payment to a major credit card.

Paying by Check

Most small business owners can pay their tax bill via check made payable to the United States Treasury. Remember that the bulk of the taxes should have been paid through estimated taxes; the check that accompanies the return should be modest.

Corporations cannot pay their income taxes by writing a check to accompany their tax return. They must pay amounts owed by depositing them with an authorized depository (explained below) or by transferring funds through EFTPS.

Paying Taxes Online

Some businesses must deposit their taxes through the Electronic Federal Tax Payment System (EFTPS) while others may choose to do so. EFTPS processes over 100 million transactions per year, totaling nearly $2 trillion, with an error rate of 0.18%. Under this payment method you authorize the transfer of funds from your bank account by using your telephone or personal computer. This payment method can be used whether or not returns are filed electronically and enables you to designate up to 120 days in advance the amount of payment to be made and the time of payment. As long as the transfer is initiated at least 1 business day before the due date of the deposit, the electronic fund transfer is considered timely.

Required Use of EFTPS

More than 97.5% of all federal tax deposits are now made electronically. ...

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