Don't Mess With Taxes

As someone who wants to be helpful — OK, I'm a moderately naggy wife — I appreciate that tendency, for the most part, in others. Even Uncle Sam.

That's why I actually was glad to see the reminder, shown at the top of this post, pop up in my email, encouraging me to make sure my second estimated tax payment on June 15 won't bounce. Since other once-a-year expenses, like auto and home insurance premiums, are due this month, too, my checking account is a bit stretched.

And it is possible the payment could slip my mind. I scheduled it back in April, right after used my Electronic Federal Tax Payment System (EFTPS) account to settle our 2022 tax bill and first estimated payment for 2023. So, again, federal tax collector, thanks.

Long-time readers of the ol' blog know I've used EFTPS for ages. But if you're new to making these four extra tax payments, here are options you can consider to make the payment due this Thursday, June 15.

Since the Internal Revenue Service is going ever more electronic, and encouraging us taxpayers to join us in this e-migration, let's start with online payment possibilities.

Use your online IRS account. You can now make tax payments through your taxpayer online account. This includes balance-due amounts and estimated tax payments. Once you pay, you can see your payment history and other tax records in your account. Access to and/or more on creating an account is at IRS.gov's Your Online Account page.

Pay with plastic. Most of us use a credit or debit card daily. Millions of us pull out plastic to pay annual tax bills. You can do the same to pay estimated taxes. The payments are made through IRS-authorized processors. This filing season, the IRS has approved the following three companies —

• Link2Gov Corporation at pay1040.com
• WorldPay US, Inc. at payUSAtax.com
• ACI Payments, Inc. at fed.acipayonline.com

A key factor to keep in mind here is one we charge-crazy consumers know all too well: debit and especially credit transactions include service charges. With taxes, however, we taxpayers cover this cost instead of the retailer, who in this case is the IRS.

Wit tax payments the credit/debit providers set their own transaction fee amounts. They're about 2 percent of the amount paid or a $2± minimum. The companies also decide which cards they'll accept for what tax payments. So check out the fees, as well as make sure the card you want to use is accepted.

Pay via Electronic Funds Withdrawal (EFW). With EFW, you e-file your return, either yourself or through a paid tax preparer, and simultaneously pay electronically from your selected bank account. There's generally no charge for paying this way. Again, note that the EFW option is available only when you electronically file a tax return.

Use IRS Direct Pay. This e-pay way is similar to EFW, but you push the payment out to the IRS rather than having it pulled from your account. You decide which account, for example, checking or savings, you want to use. Direct Pay also is free (as long as your bank doesn't charge anything), doesn't require any preregistration, and payments can be scheduled up to 365 days if you're totally in advance planning.

Use your mobile device. All y'all on-the-move taxpayers might want to pay through your mobile device. All you have to do is download the IRS2Go app. The IRS also has added digital wallet payments, such as PayPal and Click to Pay.

Phone it in. If you like to use that handheld computer known as a smartphone for actually dialing, the IRS will take your money this way, too. As just noted, there's a phone option for EFTPS payments. The same is true for paying estimated taxes with a debit or credit card.

Here, instead of going to their websites, you call one of the IRS' approved card service providers. Those numbers are —

• Link2GOV Corporation 888-PAY-1040TM (888-729-1040)
• WorldPay US, Inc. 844-PAY-TAX-8TM (844-729-8298)
• ACI Payments, Inc. 888-UPAY-TAXTM (888-872-9829)

Again, as with online payments, each provider charges a fee that varies by card type and payment amount.

Pay using EFTPS. As noted, this is my preferred method. However, if you're just now thinking about using it, it's too late for this week's payment. You need to set up your account first, and while that process is a gazillion times easier and quicker than when I enrolled decades ago, it still takes time.

If you are interested in EFTPS, go to the EFTPS website or call toll-free (800) 555-4477. Hearing or speech impaired taxpayers can use Telecommunications Relay Services (TRS); dial 711 and then provide the TRS assistant either the (800) 555-4477 number or (800) 733-4829. You also can find additional EFTPS info in IRS Publication 966.

The IRS really, really, really prefers that we send in all out payments, estimated or otherwise, electronically. But it's not a requirement (yet). So here are a few words for taxpayers who may not be Luddites, but who prefer paper when it comes to IRS transactions, including making payments.

Mail a paper check or money order. If you prefer old-school payment methods, send your due estimated tax amount as a check or money order, delivered to the IRS by the U.S. Postal Service. You also must include the appropriate 1040-ES voucher — that's the 2023 second installment one below — in the envelope. Also make sure you address it to IRS facility shown in the Form 1040-ES instructions for the place where you live. That's not the same place you sent your paper check when you paid your 2022 tax return bill.

See more tax forms and more about them at Tax Forms 2023.

There are a couple of timing considerations with snail-mailed paper payments.

First, your 1040-ES payment is considered made on time as long as the envelope in which it's mailed is postmarked by the due date. Again, that's Thursday, June 15. If you miss your local post office's final postmarking for that day, your paper payment won't get to the IRS on time and you could face late payment penalties.

Second, when you send the IRS a check (that's made out to the U.S. Treasury), you're authorizing Uncle Sam to either to use information from your check to make a one-time electronic fund transfer from your account (apparently you can't totally escape e-payment) or to process the payment as a check transaction. When the IRS uses information from your check to make an electronic fund transfer, there's no float. The Treasury could withdraw funds from your account as soon as the same day it receives the check. Plus, if this happens, you won't get a canceled copy of check for your records.

And just in case your side gigs or investments have really paid off this year, the IRS reminds you that it won't accept checks, for estimated tax or other payments, of $100 million or more. 

Pay in cash. Cash is still king for lots of folks. And the IRS does take currency payments. Sorta. The cash tax payment option is an in-person method that also involves IRS retail partners. But there's a problem this close to an estimated tax due date. As with EFTPS, to make a cash payment, you must first be registered online with credit/debit payment provider ACI Payments, Inc. or Link2Gov Corporation. The companies' online contact info is listed earlier in this post.

And that registration process, again like enrolling in EFTPS, takes time. So cash pay is not a realistic option for this week's estimated tax payment. But if you are interested in making future tax payments in cash, check out IRS.gov's Pay Your Taxes With Cash page and/or my cash tax payment post. Note, too, that the option to pay in cash will cost you; both ACI and Link2Gov charge a user fee.

You also might find these items of interest:

• Estimated taxes: Why, when, and how to pay them
• 3 ways to navigate estimated tax penalty safe harbors
• Estimated taxes due Sept. 15, but House bill proposes calendar changes
• Estimated tax payment deadlines have changed, but you still have calculation options

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