If 2008 is the year you want to pay your taxes via an electronic transfer from your bank account to the IRS, then you need to set up your Electronic Federal Tax Payment System (EFTPS) account soon.
As much as we want to ignore it, tax season -- and required tax payments -- are bearing down on us. For folks who file estimated taxes, the 2007 fourth quarter deadline is Jan. 15.
Sure, that's 5½ weeks away, and right now you're thinking you've got plenty of time to deal with it. But as you also cope with all sorts of year-end and holiday tasks, those weeks will quickly evaporate. Trust me.
You'll effectively lose around a week celebrating Christmas; more if you travel during the holiday.
Then there's lots of year-end stuff to eat away your time, including tax tasks like spending down your medical FSA or sorting through your closet for clothes that meet the "good or better" donation deductibility standard or figuring out which loser stock to dump to offset any capital gains you had this year.
And depending upon how hard you ring in the New Year, your attention to and effectiveness at anything will be essentially eliminated for a while.
Plus, although EFTPS is electronic, before you can start using it, you have to have a PIN that the IRS will mail to you the old-fashioned way.
That could take up to 15 business days, according to the agency. With holiday mail, it might take a bit longer.
So pull out your holiday and year-end must-do list and add "Sign up for EFTPS" to it, preferably near the top.
EFTPS experiences: Generally, I've been happy with the system. Some of the bugs that I encountered when I first signed up (blogged about here) seem to be smoothed out.
Of course, that didn't stop me from making a stupid mistake (blogged about here) with the system when I used it to pay our 2006 tax bill.
For 2007 taxes, though, I'm determined to get the job done smoothly. Who knows, maybe the hubby and I will end up getting a bit back this year and won't even have to worry about paying, electronically or otherwise.
Hey, everyone needs a dream, especially at tax time!
Estimated tax extra: 1040ES filers also might want to check out The Wandering Tax Pro's year-end strategy for avoiding estimated tax underpayment penalties.