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.
What triggers the IRS to audit a tax return? Learn how common tax mistakes and errors can be a red flag and affect your chances of IRS issues.
Find the current percentages for federal income tax rates, capital gains tax rates, Social Security tax rates and more from the tax experts at H&R Block.
The key to understanding your w-2 form is decoding the boxes and numbers. Learn how to read your w-2 form with this box-by-box infographic from H&R Block.
The tax experts at H&R Block outline how students and parents can file Form 8863 and document qualified expenses. Read about Form 8863 here.