[FredMitchell]

The IRS requires at least quarterly tax payments
If you have paid quarterly estimated taxes by check, you have probably been mailing them to an IRS processing center, perhaps even with return receipt service. I don't use checks and haven't for nearly two decades. I had not made estimated payments for years. Having retired recently, this new responsibility had me looking for a solution, since BillPay did not seem like a good way to go. I also did not want to deal with getting checks from a bank, postage, etc.

No mail necessary
The IRS has a service that allows you to schedule estimated payments direct from your bank. It is almost like getting your refund or social security payments deposited directly. Note, there are two options that sound the same, direct pay and online. They are not. Online is much more convenient because it remembers the accounts that you use so that you don't need to reenter your bank account and routing number for each payment (direct pay does).

I hope some who did not already know about this will find it useful.


Tax calculations
By the way, you might have been using TurboTax or some other tax preparation software to calculate estimated payments. But sometimes you may get income (or loss) surprises. If that happens, you can edit the amount to be paid, or even the date, before it comes due. I had to do that in January as a result of a surprise exercise of covered calls - it may happen with American options.

In another thread, there were questions about how to figure out unearned income and capital gains and losses. I use Schwab. You can get custom reports on demand, Year to date is most convenient, but you can also customize if you need to look at specific quarters. I would expect that all online brokerage accounts can handle this. If yours doesn't, you are probably paying too much for too little service.

[Mrprez]

You can also use an app called IRS2Go.

[Dotneko]

Originally Posted by FredMitchell

The IRS requires at least quarterly tax payments
If you have paid quarterly estimated taxes by check, you have probably been mailing them to an IRS processing center, perhaps even with return receipt service. I don't use checks and haven't for nearly two decades. I had not made estimated payments for years. Having retired recently, this new responsibility had me looking for a solution, since BillPay did not seem like a good way to go. I also did not want to deal with getting checks from a bank, postage, etc.

No mail necessary
The IRS has a service that allows you to schedule estimated payments direct from your bank. It is almost like getting your refund or social security payments deposited directly. Note, there are two options that sound the same, direct pay and online. They are not. Online is much more convenient because it remembers the accounts that you use so that you don't need to reenter your bank account and routing number for each payment (direct pay does).

I hope some who did not already know about this will find it useful.


Tax calculations
By the way, you might have been using TurboTax or some other tax preparation software to calculate estimated payments. But sometimes you may get income (or loss) surprises. If that happens, you can edit the amount to be paid, or even the date, before it comes due. I had to do that in January as a result of a surprise exercise of covered calls - it may happen with American options.

In another thread, there were questions about how to figure out unearned income and capital gains and losses. I use Schwab. You can get custom reports on demand, Year to date is most convenient, but you can also customize if you need to look at specific quarters. I would expect that all online brokerage accounts can handle this. If yours doesn't, you are probably paying too much for too little service.

I used the online system last year for my estimated payments. I was able to set up all quarterly payments in advance and it was deducted at the appropriate time. I tend to forget when the quarter is, so it was one less thing to think about.

[jimhoward]

I use EFTPS (electronic federal tax payment system). Is that the same thing, or is yours something different?

[retiredguy123]

Originally Posted by jimhoward

I use EFTPS (electronic federal tax payment system). Is that the same thing, or is yours something different?

I have been using EFTPS for many years. EFTPS is now considered a business payment, although individuals can still use it. But now, individuals can just go to IRS.gov and make a direct payment. Easy peasy.

[retiredguy123]

I never ask the IRS for a refund. There is a line on the Form 1040 where you can apply the refund to the next year tax return. This is treated the same as an estimated tax payment.

[Dave5]

Thank you so much. I did not realize this and always have had to remember when to send my payment. I plan on setting up these estimated taxes right now - and will set it and forget it. This was a great tip!!!

[Stu from NYC]

Originally Posted by jimhoward

I use EFTPS (electronic federal tax payment system). Is that the same thing, or is yours something different?

I have used this for years. My cpa gives me amounts and I authorize disbursement from my bank.

[thelegges]

Originally Posted by Stu from NYC

I have used this for years. My cpa gives me amounts and I authorize disbursement from my bank.

Our Tax accountant and CPA emails the tax burden, and I doc u sign to them, email the date to withdraw, from our business account. I don’t even remember the last time I wrote a check to government facility.

[Ecuadog]

I have been having enough money withheld from my RMDs to cover my estimatated taxes.

[vintageogauge]

I'm old school and prefer mailing in checks. Not too hard to remember when the quarters start especially if you happen to use paper calendars as we do.

[retiredguy123]

Originally Posted by Ecuadog

I have been having enough money withheld from my RMDs to cover my estimatated taxes.

It sounds like you are taking your RMD throughout the year. I always take mine as a lump sum in December. That way, the IRA income is deferred for a longer time each year.

[Rainger99]

Originally Posted by Dotneko

I tend to forget when the quarter is, so it was one less thing to think about.

Except they aren't really quarterly (every three months).

April 15 2025
June 15 2025
Sept. 15 2025
Jan. 15 2026

[Ecuadog]

Originally Posted by retiredguy123

It sounds like you are taking your RMD throughout the year. I always take mine as a lump sum in December. That way, the IRA income is deferred for a longer time each year.

No. I do the same as you.

[RoboVil]

I don't allow anything to be directly taken from my bank account. I pay via credit card which has 2% back and thinking about opening a Robinhood account to get the 3% back card. 2% just about covers the fee for paying with a credit card. For those businesses which require payment directly from a bank account (cell phone) I have set up a small account with American Express which pays 1% interest. I don't think it is ever a good idea to give any company automatic access to my accounts. Though I am sure if the IRS wanted my money they would just take it.