Electronic federal tax deposits required
Thursday, January 6th, 2011
Those tax deposit coupons are history. Beginning January 1, 2011, most businesses must make federal tax deposits electronically. If you have not yet set up your electronic deposit account, you should start the process right away, because the enrollment process can take a couple of weeks. Penalties for improper or late deposits can add up fast.
The Electronic Federal Tax Payment System (EFTPS) processes electronic funds transfers from your bank account to the U.S. Treasury. Although payroll taxes are most commonly deposited electronically, all types of taxes can be paid through the system. You can initiate a payment online or by phone. Transfers can be immediate or scheduled for a future date. Just remember to schedule the transfer at least one business day before the actual due date to ensure that the deposit is timely.
To start the enrollment process, go to www.eftps.gov or call 1-800-555-4477.
By the way, Publication 15, (Circular E) Employer’s Tax Guide is now fully updated and available. Have you updated your payroll processing for the reduction in employees’ Social Security tax? For 2011, employees pay only 4.2% instead of 6.2%, increasing their take-home pay. Employers still pay the normal 6.2% though.
If you have questions about these issues, we would be happy to help. Use the contact form, or call (865) 523-8700.