Estimated taxes don’t have to be a quarterly source of frustration. For peace of mind on tax day, plan ahead to use one of these fail-safe estimated tax payment methods.
Direct Pay is a free service from the IRS that lets you make one-time estimated tax payments from a bank account. This bank account information is not stored on entering so would need to be re-entered with each payment.
This is a major plus for security-conscious taxpayers. You can use the service without any form of pre-enrollment. Keep in mind that Direct Pay cannot be used to pay federal business taxes (you can use EFTPS for this purpose).
The IRS Direct Pay website takes you through five steps to complete payment.
- Supply tax information. This includes the reason for your payment, the tax form you want to apply the payment to (1040-ES for estimated taxes) and the tax year.
- Verify your identity. Enter your name and contact information, taxpayer identification number and filing status.
- Supply payment information. Include the date and amount of payment along with your checking or savings account and routing number. You may also pay with a credit card for a fee. You can schedule a payment up to 30 days in the future but you can’t schedule a recurring payment. Payments made using Direct Pay must be less than $10 million. Also, you cannot make more than two payments via the service within 24 hours.
- Review and make payment. Verify that all supplied data is correct through an electronic signature.
- Receive confirmation. If the payment is successful, you will see a confirmation on this final screen. Save it or print the page to keep it for your records.
Following payment, you can click “Look Up a Payment” on the IRS Direct Pay website to track payment status, edit or cancel a pending payment. You can make changes to a pending payment up to two days before the payment date.
EFTPS is the IRS’ Electronic Federal Tax Payment System. It allows you to make estimated tax payments from a bank account. Unlike Direct Pay, EFTPS gives you a login and lets you store your payment information for future use.
This means that you can make multiple or recurring payments via EFTPS. The service can be used to pay federal personal or business taxes.
Making a payment with EFTPS requires more upfront work than Direct Pay but is simple after enrollment.
- Enroll in the service before making your first payment. You will be asked to supply your bank account information during this process. You will receive confirmation, a pin and a preliminary set of login credentials.
- Login to EFTPS with your taxpayer identification number, pin and password. Update your credentials.
- Click “Make a Payment” and follow the payment flow to make an estimated tax payment for the desired amount and tax year.
If you want to pay estimated taxes via check or money order, you will need an estimated tax payment voucher. These are available toward the end of Form 1040-ES. There are four payment vouchers, one for each estimated tax deadline of the year.
Fill out the correct one and make your check or money order payable to the United States Treasury (not the IRS). Mail the voucher and payment to the appropriate processing center address identified in Form 1040-ES.
MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.