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

IRS Letter 545 – We Recalculated Your Tax – You Filed More Than One Return

Learn more about letter 545, why you received it, and how to handle an IRS 545 letter with help from the tax experts at H&R Block.

IRS Letter 3173 – Third Party Contacts

The IRS has contacted third parties to help figure out what you owe. Learn more about letter 3173 from the tax experts at H&R Block.

IRS Notice LT14 – You Have Past Due Taxes

Learn more about notice LT14, why you received it, and how to handle an IRS bill for unpaid tax with help from the tax experts at H&R Block.

Latest Tax Form Changes: Form 1095 For All

This year, most people will get a Form 1095 to report details about their health insurance. Learn more about Forms 1095-A, B and C at H&R Block.