The IRS no longer accepts paper checks for tax payments nor issues paper check refunds. This is a significant procedural change affecting all taxpayers. All tax payments and refunds processed by the IRS must now be conducted electronically. What are your next steps?
To make estimated tax payments you have the following options:
- IRS Direct Pay: This system requires no registration, you can schedule electronic payments directly from your bank account, and offers confirmation numbers and payment tracking capabilities.
- Electronic Federal Tax Payment System (EFTPS): Enrollment is required at least a week in advance. This offers enhanced functionality for recurring payments and payment scheduling.
- Financial Institution Services: Many banks and investment advisors currently utilize electronic payment systems on behalf of clients. Confirm your financial institution’s electronic payment capabilities and authorize appropriate arrangements.
For tax return processing with electronic funds transfer:
- Most tax preparation software accommodates electronic funds transfer (EFT) authorization for both tax payments and refund deposits (direct deposit). Ensure your tax preparer has your current electronic banking information on file.
- Returns with outstanding tax liability will require bank account information for automatic withdrawal.
- Returns generating refunds that are not being applied to subsequent tax year obligations require bank account information for direct deposit.
- Estimated tax obligations can be authorized through the return itself, enabling automatic quarterly withdrawals without separate payment submissions.