What is the EFTPS (Electronic Federal Tax Payment System)?

Remotepedia
Panther
July 27, 2021

Definition

The EFTPS is an online tool for paying federal taxes. It’s the most comprehensive online payment option that the United States provides. For most businesses and individuals, the EFTPS is the best way to pay taxes.

The EFTPS is popular because it’s a simple, secure, and easy way to pay taxes online: You won’t have to pay by mail or in person.

EFTPS Cheat Sheet: What you should know

  • You’ll have to enroll before you can use the EFTPS. After you apply, it will take up to five business days until you get approved. We’ll cover how to apply down below (it’s pretty simple). 
  • It’s not the same as IRS Direct Pay. If the EFTPS is the Swiss Army Knife of taxpaying, IRS Direct Pay is a standard butter knife. The EFTPS will store your information, let you schedule payments in advance, and there’s no limit on payment size. Direct Pay is simply an online tool for individual taxpayers to make a payment as quickly as possible.

You’ll use the EFTPS for all types of tax payments

If you owe federal taxes to the IRS, the EFTPS is the easiest way to get those taxes paid. It’s a great option because the system will store all of your information: Past payments, future scheduled payments, and more. It’ll keep your stuff in one place. Here’s what you can do with the tool:

  • Pay income, employment, excise, and estimated federal tax payments.
  • Schedule payments up to 365 days in advance.
  • Make a payment anytime, any day of the week.
  • See 15 months of your past payment history.
  • Get help from the EFTPS’ customer service employees.

It’s safer to use the EFTPS than it is to mail a payment to the IRS. The site has been in operation for more than 20 years, and there are a wide range of checks in place to make sure your account is safe.

Enrolling is easy––here’s how

It should take you less than 10 minutes to apply for the EFTPS. Here’s what you’ll need

  • Your Taxpayer Identification Number (TIN). If you’re paying for a business, this is your EIN (Employer Identification Number). If you’re paying as an individual, this is your SSN (Social Security Number).
  • Your bank account details. Pick the account you’re going to pay with and collect your account number and routing number.
  • Your name and address. You’ll need these: The IRS will be mailing you a 4-digit PIN, and you’ll need this PIN to set up the account.

You can do this all on the EFTPS site. When you’re done, wait up to five business days. When you receive a letter from the IRS, register with the 4-digit PIN you’ve been provided. Once you’ve done that, you’re clear to start using the EFTPS to pay taxes.

Why do we know this stuff?

Well, it’s nice to meet you: We’re Panther. We’ve got the answers about the EFTPS and just about any other employment-related term because our day job is helping companies hire remotely, all across the globe.

We believe that the future of work is remote (and global). That’s a bit of a cliffhanger––so you can learn how to make it happen for your team.