February 2, 2015

New Options for Paying Your Taxes Online

As we approach the April 15th tax filing deadline, we wanted to provide a summary of electronic payment options available to taxpayers.

NEW FOR 2014 – IRS adds direct pay option (INDIVIDUALS ONLY)

Federal Payments for Individuals:  http://www.irs.gov/Payments/Direct-Pay

Similar to the existing CA WebPay, the new IRS payment option allows taxpayers to make their tax payments electronically, from a checking or savings account, without formal registration.  This is an optional service.  Users can login with their personal information and make their Federal tax payment quickly and easily.  Taxpayers will also be able to review past payments with the confirmation number provided when they make payments.

All other IRS Payments (Business entities, Trusts, Foundations etc)

Federal Payments:  https://www.eftps.gov/eftps

The Electronic Federal Tax Payment System (EFTPS) is an optional service provided by the US Treasury. Online setup is quick; however, for security purposes, taxpayers will receive a PIN number in the mail which takes 7-10 days to receive in order to access their account.  Individuals who have already signed up for EFTPS can continue to use this system. Taxpayers who enroll with the EFTPS system will be able to easily access a history of the payments that they have made for Federal purposes.

California Web Pay (Individuals & Businesses entities only)

California Payments: https://www.ftb.ca.gov/online/webpay/index.asp

CA mandates electronic payments once taxpayers:

  1. Make an estimated tax or extension payment over $20,000; OR
  2. File an original return with a tax liability over $80,000

Once payment is made electronically, all future payments must be made using the Web Pay service.  Setup time is minimal and no registration is required.  For those taxpayers who register, a history of payments, wages, withholding, refunds, and various other resources is available.

Credit Card Payments:

Third party processors charge service fees ranging from 1.89%-2.35% of your tax payment.  Credit card reward point are not always offered for tax liability payment, please check your provider. You can find a list of recommended services here:

Federal: http://www.irs.gov/uac/Pay-Taxes-by-Credit-or-Debit-Card
California (For Individuals): https://www.ftb.ca.gov/online/CCard.shtml
California (For Businesses):https://www.ftb.ca.gov/online/credit_card_businesses.shtml

We are happy to discuss what method might work best for your specific situation or to assist in the process of registration or making a payment. Please do not hesitate to contact us if you would like assistance.