Questions: What is EFTPS Is there a cost to use EFTPS? What are the benefits of using EFTPS? How does EFTPS work? Can I schedule payments in advance? What type of taxes can be paid through EFTPS-Online www.eftps.gov? Why should I enroll in EFTPS? What if I cannot locate my Confirmation or PIN letter? What if I loose or forget my Internet Password? What if I use a Payroll Service or Accountant? Who can use EFTPS? Who is required to use EFTPS? If I am required to use EFTPS and use a paper coupon deposit instead, what happens? What do I gain by using IRS e-file? Do I really get my refund faster? Is there a fee for IRS e-file? If I owe, how do I pay my taxes electronically? What Federal individual income taxer can I pay by electronic funds withdrawal? How can I pay by electronic funds withdrawal from my checking or savings account? What types of Federal individual income taxes can I pay by credit card? How can I pay by credit card and which credit cards are accepted? Can I pay my balance due by phone or Internet with a credit card if I'm a "married filing joint" filer? What if I owe and cannot pay the full balance due? What happens if my return is filed electronically, I am receiving a refund, and I owes taxes from previous years? If my return is electronic, how do I sign it? What is the Self-Select PIN? Do I have a greater chance of being audited by the IRS if I use IRS e-file? Can my state tax return be e-filed with my Federal return at the same time? Can my state return be e-filed without my federal return? Where can I get additional information abour IRS e-file? Answers: What is EFTPS EFTPS is the Electronic Federal Tax Payment System developed by the U.S. Department of the Treasury’s Internal Revenue Service (IRS) and Financial Management Service (FMS), to enable taxpayers to pay their federal taxes electronically. The system allows taxpayers to use the Internet www.eftps.gov, personal computer (PC) software, or phone to initiate tax payments to EFTPS directly. EFTPS payments may also be initiated through your financial institution. It’s convenient, secure, and timesaving. Top Is there a cost to use EFTPS? No. EFTPS does not charge taxpayers for its services. However, if you choose to use EFTPS-Through a Financial Institution or the Same Day Payment mechanism (both available only to businesses) you may incur a fee from your financial institution. Please check with your financial institution directly to inquire about their fee structure. Top What are the benefits of using EFTPS? EFTPS offers you many benefits over the traditional paper system: • it’s fast…you can make a tax payment in minutes • it’s accurate…because there are verification steps along the way, you are able to check and review your information before it is sent • it’s convenient…EFTPS is available to you by Internet, PC software or phone—24 hours a day, 7 days a week, and can be used to schedule payments in advance • it’s easy to use…it’s a step-by-step process that tells you what information you need to successfully complete your tax payment for any federal tax • it’s secure…EFTPS offers the highest levels of security on the Internet Top How does EFTPS work? With EFTPS-Direct, you make your tax payments at least one calendar day prior to the tax due date. Based on your instructions, EFTPS initiates a debit against your bank account and your tax records are updated with the IRS. You can use EFTPS-OnLine http://www.eftps.gov, EFTPS-PC Software or EFTPS-Phone to make your payments. With EFTPS-Through a Financial Institution, you will initiate your tax payment through a service offered by your financial institution. Your financial institution will debit your account and send the tax payment electronically. You should first check with your financial institution to see if they offer the service and the fees involved. Top Can I schedule payments in advance? Yes. Business taxpayers can schedule tax payments up to 120 days in advance, and individual taxpayers can schedule payments for up to 365 days in advance of due date. Top What type of taxes can be paid through EFTPS-Online www.eftps.gov? Individual taxpayers can pay all individual tax types including estimated taxes, balance due payments, installment payments, even estate and gift taxes. Business taxpayers can pay all types of federal taxes, including employment taxes, excise taxes, and corporate income taxes. Top Why should I enroll in EFTPS? EFTPS makes paying federal taxes easy and convenient. By enrolling in EFTPS, you can make your payments electronically from the convenience of your office or home, using the Internet, the PC software or phone. It eliminates the need for you to complete Federal Tax Deposit (FTD) coupons or vouchers, write a check, and take that check and coupon to a financial institution or the Post Office prior to tax due date. EFTPS is easy to use, accessible 24 hours a day, 7 days a week. It allows you to make payments with short lead-time, and you can even schedule future payments if your tax liability is known in advance. Top What if I cannot locate my Confirmation or PIN letter? If you cannot locate your Confirmation or PIN letter, please call EFTPS Customer Service at 1-800-555-4477 or 1-800-945-8400. Top What if I loose or forget my Internet Password? If you lose or forget your Internet Password, you will need to locate your original enrollment Confirmation materials or PIN letter you received by mail and call EFTPS Customer Service at 1-800-555-4477 or 1-800-945-8400. Top What if I use a Payroll Service or Accountant? You should still enroll in EFTPS, even if you use a third party (such as a payroll service or accountant) to make your tax payments. You can check out your payment history or make other payments online if you enroll for EFTPS-Direct. Check with your provider to determine which taxes they are paying on your behalf. If you wish to make payments other than those being made by a third party, you will need to complete an additional Enrollment through EFTPS-OnLine or by calling 1-800-555-4477 or 1-800-945-8400 for a paper enrollment form. For example, if you are a business and a third party makes your payroll tax deposits for you and you wish to make your year-end 1120 corporate income tax payments through EFTPS-OnLine, you would complete an Additional Enrollment under your Taxpayer Identification Number (EIN). Click on "Additional Enrollment" at www.eftps.gov. Top Who can use EFTPS? Any individual taxpayer, especially those making 1040ES payments can use EFTPS-OnLine. Any business taxpayer can use EFTPS for any tax type. Top Who is required to use EFTPS? Some business taxpayers are required to use EFTPS because they have met certain criteria—specifically, if your total deposits of designated federal taxes (including employment taxes, income taxes, Railroad Retirement taxes, Social Security taxes, and various other types of non-payroll withholding) during a calendar year exceed $200,000, you are required to use EFTPS beginning in the second succeeding calendar year. For example: if you had more than $200,000 in deposits of designated taxes in calendar year 2001, you are required to use EFTPS beginning January 2003. Top If I am required to use EFTPS and use a paper coupon deposit instead, what happens? If you are required to use EFTPS and do not, a 10% penalty may be applied. However, you may qualify for relief from the penalty for failing to deposit in the proper manner if the reason is due to reasonable cause and not to willful neglect. IRS will evaluate each request for relief on its own merits. Top What do I gain by using IRS e-file? Accuracy! Security! Electronic Signatures! Proof of Acceptance! Fast Refunds with Direct Deposit! Electronic Payment Options! Federal/State e—file! Only IRS e—file offers these advantages. Top Do I really get my refund faster? With IRS e-file, you get it back in half the time. It’s even faster and safer if you have your refund deposited directly to your bank account - in as few as 10 days. Ask your ERO for the estimated date of deposit. For more information about Direct Deposit, go to the Financial Management Service (FMS) website, www.fms.treas.gov/eft/. Top Is there a fee for IRS e-file? The IRS does not charge a fee for e—filing. Your ERO will be glad to explain their fees for tax preparation and e—filing. However, these fees are not based on any figures from your tax return. Top If I owe, how do I pay my taxes electronically? You can authorize an electronic funds withdrawal from your checking or savings account at the time your tax Year 2002 Form 1040 series individual tax return is electronically prepared. You can also e—pay by credit card. Top What Federal individual income taxer can I pay by electronic funds withdrawal? Payment can be made for current year: • Individual Income Tax Returns (1040 series), • Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, • Form 2350, Application for Extension of Time to File U.S. Individual Income Tax Return, and • Tax Year 2003 Form 1040-ES, Estimated Tax for Individuals. Electronic payment eliminates the need to mail a paper Form 1040-V, Payment Voucher, Form 4868, Form 2350 or Form 1040—ES. e—filing your balance due return with an electronic payment is a safe, secure and convenient way to be assured of on—time receipt of both the return and payment. This reduces the chance of errors. Top How can I pay by electronic funds withdrawal from my checking or savings account? Most tax preparation software allows you to e—file a balance due return and, at the same time authorize an electronic funds withdrawal from your checking or savings account. The withdrawal cannot be authorized after the return is transmitted. You can schedule a withdrawal for a future date up to and including April 15, 2003. The software includes instructions on the information needed to complete the payment including your bank account number and the routing transit number of your financial institution. Check with your financial institution to be sure that electronic fund transfers can be authorized from your designated bank account (money management accounts, money market accounts, certificate of deposit accounts and some credit union savings accounts do not allow for such transactions). Your tax payment will be listed on your bank statement as a “United States Treasury Tax Payment” as proof of payment. Additionally, you receive an electronic acknowledgement once your electronic return is received and accepted. Note: There are no additional transaction charges for electronic funds withdrawals authorized to pay taxes. Note: Only authorized withdrawals can be made. No other funds can legally be withdrawn. Top What types of Federal individual income taxes can I pay by credit card? Payment can be made for current year: • Individual Income Tax Returns (1040 series), • Balance Due Notices, • Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, • Tax Year 2003 Form 1040ES, Estimated Tax for Individuals, and • Installment Agreements for Tax Year 1999 through 2002 taxes. Check with your software provider regarding the availability of a credit card payment option when you e-file. All of the above—named tax types can be paid by phone or Internet through two credit card service providers (Link2Gov Corporation and Official Payments Corporation). The service providers charge a convenience fee for credit card transactions. You are informed of the convenience fee amount before you authorize the payment. Note: The IRS does not receive or store credit card numbers. The private credit card service providers verify the validity of the card and line of credit and forward the appropriate tax payment information to the IRS. Top How can I pay by credit card and which credit cards are accepted? Credit card payments must be made electronically. You can e—file and e—pay by credit card if the tax software you use includes this option. You may also pay by calling a toll-free service (l-888-PAY-1040 or 1 —800-2PAY-TAX) or accessing the Internet www.PAY1040.com or www.officialpayments.com. All major credit cards (American Express Card, Discover Card, MasterCard card and Visa card) are accepted. You can make partial payments by phone or Internet, but there is a limit to the maximum number of payments for each type of tax. If you pay by credit card, you delay out—of-pocket expenses and may earn miles, points, rewards or money back from your credit card issuer. You will be provided a confirmation number at the end of the payment transaction and your credit card statement will provide proof of your payment. The payment and return data are reconciled by the IRS based on the social security number entered and the type of tax selected during the transaction. Top Can I pay my balance due by phone or Internet with a credit card if I'm a "married filing joint" filer? Yes. Just be sure to enter the Social Security Number of the first taxpayer listed on the return’s pre-printed mailing label or postcard. Top What if I owe and cannot pay the full balance due? The tax preparation software used by your tax professional may allow you to make partial payments. If partial payments are allowed, you can make a payment for less than the balance due amount on your return. If you cannot pay in full by April 15, 2003, you can file Form 9465, Installment Agreement Request. This form is available electronically. An approved Installment Agreement allows you to make a predetermined series of partial payments after April 15, 2003. Regardless of how you pay, you are responsible for paying the amount of tax due by April 15, 2003, or you will be subject to late payment penalties and interest. Top What happens if my return is filed electronically, I am receiving a refund, and I owes taxes from previous years? The amount owed on back taxes is automatically deducted from your refund just as if you filed a paper return. If you go to a tax preparer to get a Refund Anticipation Loan (RAL), you must tell your tax preparer that you owe back taxes. Top If my return is electronic, how do I sign it? The most convenient way for you to sign your electronic return is to use a self—selected Personal Identification Number (PIN). It’s completely paperless! If you do not choose t) self-select a PIN, you simply sign a signature document, Form 8453, U.S. Individual Income Tax Declaration for an IRS e-file Return. If you are under the age of 16 and filing your first tax return or if your return contains an attachment required to be submitted to IRS, you must use Form 8453. Top What is the Self-Select PIN? The Self Select PIN allows you to personally sign your electronic tax return using a five—digit number: The Self-Select PIN serves as your signature and actually takes the place of Form 8453. The process includes self-selecting a five—digit Personal Identification Number (PIN) and entering your Adjusted Gross Income (AGI) from your originally filed tax year 2001 income tax return (do not use an amount from an amended return, Form 1040X, or a math error correction notice). The AGI is on Line 33 of Form 1040, Line 19 of Form 1040A, Line 4 of Form 1O4OEZ or Line I of the TeleFile Tax Record. You should ensure your Date of Birth is accurate and matches the information in Social Security Administration’s (SSA) files prior to e—filing by checking your SSA statement entitled, “Your Social Security Statement.” Since tax preparation software packages may vary, consult your particular package for more details. For more detailed information on qualifications and required taxpayer information on the Self-Select PIN or on IRS e—file, please visit the IRS web site at www.irs.gov. Top Do I have a greater chance of being audited by the IRS if I use IRS e-file? No. The chance of an audit of an e—filed return is no greater than with a paper return. Top Can my state tax return be e-filed with my Federal return at the same time? There are 37 States and the District of Columbia participating in the IRS e—file program. To see if your state participates, please visit www.irs.gov or ask your ERO for additional information. Top Can my state return be e-filed without my federal return? Yes, beginning January 2003, you will be able to e-file your State return without the standard Form 1040 attached. You may visit the IRS web site at www.irs.gov for the names of states participating in State Only filing. Top Where can I get additional information abour IRS e-file? Visit the IRS web site at www.irs.gov. Top