Boost your efforts for a paperless home office by paying your home business taxes online.
Even though most of my bills are automated, paid electronically through automatic debit, one of the bills I still write a check for is my quarterly estimated tax payment. Every quarter, I write a check. Because there is something satisfying about mailing the check on the day it's due and not actually having the money taken out until more than a week later.
However, I've been rethinking this method recently. Recently, I've been fairly lax. In fact, I twice forgot to send out my quarterly payments in 2012 since I've been so busy, and there was a lot of running around due to Miranda's Summer of Awesome (which actually lasted from April through the end of September). I need to pay my quarterly taxes since I'm self-employed. But paying late (twice!) means I have to pay interest penalties to the IRS. That defeats the purpose of sending out the payment at the last possible second and keeping my money as long as possible.
Quarterly Tax Payments Online
Due to the lapses I suffered over the course of the year, it occurred to me that maybe I need to add my home business taxes to the ranks of automatic bill payments. Lucky for me, the IRS is always accommodating in helping taxpayers keep up with what they owe.
If you want to make electronic tax payments, you can do so by enrolling with the Electronic Federal Tax Payment System (EFTPS). Enrolling takes a little effort, though. Once you begin the process, you provide information about the primary taxpayer and joint filers (I signed up as an individual rather than a business because my LLC is a pass-through). You share contact information including financial information about your bank routing and account numbers.
Once you have completed the forms, the information is then verified. When the IRS has verified the information, it will send you a PIN via regular U.S. Mail. It's important to note that the EFTPS has a current policy of contacting you by mail rather than by email, so beware of phishing attempts that claim to be from the IRS.
Benefits of EFTPS for Home Business Taxes
One of the nice things about the EFTPS system is that it has recently changed to allow you to select your tax period and settlement dates. You do need to schedule your payment ahead of time, though. For the payment to be received in a timely manner, you need to schedule it by 8 p.m. Eastern Time, the day before the due date. So keep that in mind.
It's possible to schedule your payments well in advance. Businesses can schedule payments up to 120 days in advance, and individuals can schedule up to 365 days in advance. Since I signed up as an individual, I can schedule all of my tax payments for the year at once, which can be helpful. A set it-and forget-it effort for paying my home business taxes.
Boost your efforts to make your home office paperless. Ensure that your quarterly estimated payments are made to the IRS when they should. Consider enrolling with the EFTPS. It's convenient and relatively easy to use.
