Pay Income & Estimated Tax Without Vouchers?

[TromboneAl]

I could use Vanguard's Billpay to pay my Fed and State income tax and estimated tax payments. I would save myself the bother of writing 10 checks, and avoid the chance of forgetting the estimated tax payments or having payments lost in the mail.

However, I could not use the vouchers, and have the small risk that the payments wouldn't be credited properly.

Which do you think is the best option?

 

[audreyh1]

I use EFTPS (the Electronic Federal Tax Payment System) to pay Federal estimated income taxes electronically (I don't have any state). You can schedule well in advance, and you don't have to remember. They draw on your bank account - just make sure you have the balance covered in time for scheduled payments!

I also pay whatever is due April 15 this way as well.

And you can see a report of how much you paid, so you can be sure they are properly credited. You just need to be sure to get the tax year right.

Don't know what to do for state taxes.

Audrey

 

[TromboneAl]

Yes, I decided to do that for the state taxes, since I'm paying all the estimated payments in a lump sum (it's only $400).

But I have a somewhat irrational phobia about giving out checking account numbers, although I know I'm doing that every time I write a check. A difference is that they may store my account numbers online, so when they get hacked or someone loses their laptop, I have to be concerned.

 

[Gotadimple]

Yes, I decided to do that for the state taxes, since I'm paying all the estimated payments in a lump sum (it's only $400).

But I have a somewhat irrational phobia about giving out checking account numbers, although I know I'm doing that every time I write a check. A difference is that they may store my account numbers online, so when they get hacked or someone loses their laptop, I have to be concerned.

Hmmm. . . If the IRS owed you money would you let them deposit it into your checking account? Just wondering . . . it's the reverse of letting them draw from your account to pay your estimated taxes.

I'll second everything Audrey had to say - it is absolutely flawless to use.

-- Rita

 

[TromboneAl]

Yes, ETPS seems like a good way to go. I just enrolled, but now I have to wait for them to snail mail me a PIN so I can make a payment.

 

[Sue J]

2011 is the first year that my son has to make estimated payments. I helped him with his 2010 taxes and coached him on what to do for 2011. He just got his PIN in the mail (in less than a week) and it was very easy to set up the 4 payments online. Nice system.

 

[TromboneAl]

Update

I got my PIN today, finished the enrollment, and made the payments and scheduled future payments.

The system works, but I found it stupid and clunky, like something from the 1980s.

For example, you enroll, then get your enrollment number and your PIN in the mail. Then you go to the site and give your PIN and part of your enrollment number to get a chance to create a password.

Next, you can log in, and you use your SSN and your PIN and your password. IOW, you have two passwords. Two passwords are not more secure than one password, they're just more hassle.

To make 1040 ES payments, I have to select the "1040 tax form" not "1040 ES" which is what would make sense to me.

I went through the process of entering the four estimated tax payments and dates, and the confirmation screen shows "Not Required/2011" for the tax years, even for the last payment. The "Not required" was not helpful.

I then get to the final step, choose Make Payment, and get a "System error -- call this 800 number." I call the number, but am not willing to give my SSN in case I've been phished.

So I go through everything again, and this time it works. I'll see whether it deducts two payments each period.

So, bottom line is that this thing works, but it wasn't designed by tech-savvy people, and I don't really trust it. If I were doing it over again, I'd just pay electronically with my SSN and 1040ES on the checks.