best way to pay taxes

[frank]

I was just curious as to which way people on the site pay taxes. credit card, ach, snail mail? I have been efiling for quite a few years, but have always used snail mail to make the estimated and final payments. what do you use? thanks

frank

[Dash man]

I use ach and have never had a problem. Credit cards have too high a fee that takes away the benefit of the points I would earn using them. I don’t send checks in the mail unless I have to.

[scrabbler1]

I use ACH to make my estimated tax payments, but I print out and mail forms in April with a check for the regular returns. No e-file for me on the main returns.

[Nemo2]

Tried I.O.U.s to no avail.

(Naah, we e-file)

[pb4uski]

For my return, I provide the routing and account numbers for our bank account and they pull what we owe or push us a refund.

I used to do estimated taxes via EFTPS, but now just do a tIRA withdrawal with 99% withholding as part of my year end tax planning since the IRS counts withholdings as if paid throughout the year.

[PointBreeze]

Quote:

Originally Posted by pb4uski For my return, I provide the routing and account numbers for our bank account and they pull what we owe or push us a refund. I used to do estimated taxes via EFTPS, but now just do a tIRA withdrawal with 99% withholding as part of my year end tax planning since the IRS counts withholdings as if paid throughout the year.

What a great idea! Much easier than doing estimated taxes. Thanks.

[bizlady]

We pay via EFTPS as well as the state site. We set up the first 3 quarters to automatically get paid, and then adjust and set up the 4th quarter early Dec. IF we owe in April, we set that up EFTPS as well.

[scrabbler1]

Quote:

Originally Posted by pb4uski I used to do estimated taxes via EFTPS, but now just do a tIRA withdrawal with 99% withholding as part of my year end tax planning since the IRS counts withholdings as if paid throughout the year.

I do this for my (snake-bit) friend with his inherited IRA's RMD. He doesn't need the RMD as cash, but it greatly helps cover the taxes on the taxable investment income from the same inheritance the IRA was part of. It sometimes but not always keeps him in a "safe harbor," and avoids the added trouble of having to make an estimated tax payment. Because the state income taxes are lower than the federal ones, I can always make sure he gets into one safe harbor if I can't get him into both.

[vince]

I find their web site the most convenient for paying quarterly estimates.

https://directpay.irs.gov/directpay

[ArkTinkerer]

Quote:

Originally Posted by pb4uski For my return, I provide the routing and account numbers for our bank account and they pull what we owe or push us a refund. I used to do estimated taxes via EFTPS, but now just do a tIRA withdrawal with 99% withholding as part of my year end tax planning since the IRS counts withholdings as if paid throughout the year.

Can this be done with a Roth? I know you can ask for them to withhold even though it is not suppose to be a taxable event. Odd I know, but just curious how far this can stretch! What about a regular stock sale from outside an IRA?

[NW-Bound]

Quote:

Originally Posted by pb4uski For my return, I provide the routing and account numbers for our bank account and they pull what we owe or push us a refund. I used to do estimated taxes via EFTPS, but now just do a tIRA withdrawal with 99% withholding as part of my year end tax planning since the IRS counts withholdings as if paid throughout the year.

+1

No estimated tax payments for me, as I pay as I go with the withholding on my IRA withdrawals. Pretty much painless, although I tend to overpay then get my money back.

[gerntz]

I prefer paying via IRA withdrawal near end of year.

[RockyMtn]

Doesn't the "use the TIRA to pay taxes" strategy only work if it doesn't kick you into the next tax bracket?

[kgtest]

Quote:

Originally Posted by scrabbler1 I do this for my (snake-bit) friend with his inherited IRA's RMD. He doesn't need the RMD as cash, but it greatly helps cover the taxes on the taxable investment income from the same inheritance the IRA was part of. It sometimes but not always keeps him in a "safe harbor," and avoids the added trouble of having to make an estimated tax payment. Because the state income taxes are lower than the federal ones, I can always make sure he gets into one safe harbor if I can't get him into both.

Your friend was bit by a snake? Are they ok?

[scrabbler1]

Quote:

Originally Posted by kgtest Your friend was bit by a snake? Are they ok?

LOL no (about the snake), but the jury is still out (about his being ok). I was referring to the friend I have written about a lot in the last 5 years in this thread:

http://www.early-retirement.org/foru...ant-71478.html

Whenever he does something really weird or dumb, or something really weird or dumb happens to him, I vent a little and write about it there. Seems to have a decent following. You are welcome to read the entire saga.

[scrabbler1]

Quote:

Originally Posted by RockyMtn Doesn't the "use the TIRA to pay taxes" strategy only work if it doesn't kick you into the next tax bracket?

I think what the others are writing about (I know it is what I mean) is the use of TIRA withdrawals one would be making anyway to pay existing taxes which are going to come due. I'm not sure anyone is suggesting that someone make an additional withdrawal from a TIRA to pay existing taxes because that act itself will increase one's taxes.

[audreyh1]

eftps.gov - I schedule all withdrawals by IRS for estimated taxes and the final 1040 payment.

There was a recent thread discussing payment options.

We aren't withdrawing from IRAs yet.

[jollystomper]

Quote:

Originally Posted by pb4uski I used to do estimated taxes via EFTPS, but now just do a tIRA withdrawal with 99% withholding as part of my year end tax planning since the IRS counts withholdings as if paid throughout the year.

Thanks - I was looking at doing quarterly estimated taxes for interest/dividends/cg income, but since so much of my CGs happen towards the end of the year, it makes sense for me to do this with my 401K.

Now back to the original question - if I owe taxes Fed or state taxes in April, I mail a check.

[pb4uski]

Quote:

Originally Posted by RockyMtn Doesn't the "use the TIRA to pay taxes" strategy only work if it doesn't kick you into the next tax bracket?

Yes, but in my case it is all part of my plan for withdrawals. So for example, let's say you plan to draw $50k for the year and expect your estimated taxes to be $3k. Just do a $50k withdrawal and have 6% withheld... they'll take out $50k... send the IRS $3k on your behalf and deposit $47k to the account that you designate.

[gerntz]

Quote:

Originally Posted by RockyMtn Doesn't the "use the TIRA to pay taxes" strategy only work if it doesn't kick you into the next tax bracket?

In 2017, I made a withdrawal & had taxes taken out. Then before I filed, I did a rollover with other funds to pay back into the IRA. It saved making quarterly payments through the year before I had an idea of what our taxes would be. Never have made a Q payment & never intend to.

If you're doing big enough withdrawals anyway, or have to make RMD's big enough, you don't have to deal with the rollover thing.