What Are the Advantages of Electronic Funds Withdrawal?
Electronic Funds Withdrawal (EFW) is an integrated e-file / e-pay option offered by the IRS for paying your taxes online. This method of payment is available only when filing your federal taxes using tax software, online tax filing products, or through a tax professional. When you choose this option, you can submit one or more payment requests for direct debit from your designated bank account.
With an Electronic Funds Withdrawal, you can choose the date of your payment as long as it’s on or before the tax deadline.
Advantages of Electronic Funds Withdrawal
There are several benefits of choosing an Electronic Funds Withdrawal.
- If you have a large balance due, you might want to schedule your payment for a later date, so you can earn interest on your money in the meantime.
- It’s convenient, as individual and business filers can e-file and e-pay in a single step.
- The IRS doesn’t charge a fee to use EFW.
- It’s safe and secure, as payment information is used only for the tax payment(s) authorized.
What Happens When You Use Electronic Funds Withdrawal?
Once you file and your electronic funds withdrawal goes through, you’ll see proof of payment on your bank statement as “IRS USA Tax Payment” or similar. The payment amount will be debited in a single transaction; no recurring or partial withdrawals will be made. It’s important to note that federal tax deposits cannot be made via the EFW payment option.
For payment options for making federal tax deposits, please refer to the tax form instructions.
Get the facts about IRS manager conferences, which may allow you and the IRS to come to an agreement, but remember to protect your appeal rights.
Can you deduct an early withdrawal penalty from your taxes? Knowing the answer can make a difference. Get tax answers at H&R Block.
Get the facts about IRS audits. Learn more about the types of IRS audits and the process of being audited from the tax experts at H&R Block.
Get the facts from H&R Block about the most common IRS penalties for filing and paying late and learn how to request penalty removal if you qualify.