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.

Related Topics

Related Resources

How to File Business Back Tax Returns with the IRS

Learn how to file your business back tax returns with the IRS and resolve any related tax issues, such as business back taxes and IRS penalties.

From Our Latina Bloggers: Ideas For Spending And Investing Your Refund

From paying down debt to splurging on vacation, H&R Block's Latina bloggers have great tips for ways to invest or spend your tax refund smartly.

IRS Payment Plan? Here’s What Happens to Future Refunds

Find out what happens with your future tax refunds when you have an IRS payment plan established. Review these details from H&R Block.

IRS Notice CP501 – You Have Unpaid Taxes, Amount Due

Learn more about form CP501, why you received it, and how to handle the notice with help from the tax experts at H&R Block.