The Internal Revenue Service offers a free service that accepts regular payroll tax deposits electronically or by phone. The Electronic Federal Tax Payment System also allows businesses to schedule payments in advance. Once enrolled in EFTPS, businesses have the option of making deposits online or by phone -- you are not limited to one method. Both methods are available 24 hours per day and the system is secure, accurate and convenient to use. Payments made through EFTPS post to your account immediately, which reduces the risk of late payment penalties for lost or misapplied payments.
Enroll in the EFTPS system. Visit the EFTPS site (See Resources) and select the “Enrollment” tab. Register as a business to access payroll deposit options. Complete information on your company to finish creating your account. The IRS issues PIN and password instructions to you following registration. Look for these items to arrive by mail within seven business days.
Login in to the system to begin the deposit process. Once you receive your PIN and password instructions, you can login to EFTPS to deposit payroll taxes.
Begin your payment. Select the option to make a payment and choose the period you want to apply your deposit to. Payroll taxes are usually deposited and reconciled quarterly. First quarter runs from January through March; second quarter runs April through June; third quarter runs July through September and fourth quarter runs October through December. Most businesses have monthly deposit requirements. If you deposit monthly, your payment must be made on the 15th of each month, and should cover payroll taxes for the previous month. Enter your deposit amount for the period selected.
Submit your payment. After you submit your payment, your bank account is debited immediately. The EFTPS system keeps real time records and your deposits post to your tax account upon settlement. The EFTPS system also tracks your payment history and you can print deposit records as needed.
With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.