Small business owner with employees should get to know the IRS’ Electronic Federal Tax Payment System, a free tool to help manage and meet tax obligations. The experts at Optima Tax Relief highlight what every small business owner needs to know about the EFTPS.
Being a small business owner can be extremely rewarding – whether you are in the business of providing goods or services to your customer base or taking a leap into the life of entrepreneurship. It can, however, also be a great source of stress – especially for those small businesses that are responsible for managing a team of employees. The IRS has several tools available to aid the small business owner in managing their tax-related obligations related to being an employer. Optima Tax Relief provides their guidance on how small business owners can benefit from one of these tools, the Electronic Federal Tax Payment System (EFTPS).
Whether a small business prepares, manages and submits payroll taxes in house, or if they outsource this function to a payroll service provider, the EFTPS is a free service that enables small business owners to have full transparency and control of their employee-related tax obligations.
The EFPTS service is available to all small businesses with employees and enables small business employers to comprehensively manage their employee-related tax responsibilities electronically, 24 hours a day, seven days a week. For many small businesses that have elected to outsource their payroll tax management to a third party payroll processing company, this tool can be especially useful as it provides transparency into those third party transactions and enables small business owners to mitigate compliance issues initiated externally by the third party.
Employers who wish to leverage the EFTPS tool to help manage their third-party payroll vendor’s compliance should make sure they have their EFTPS Inquiry Pin. Once the Inquiry Pin is activated, the employer is then able to monitor all third-party tax payment transactions. If the employer opts-in for emails, they will automatically be notified via email when payments are scheduled, cancelled, or returned – making it easy to monitor all third-party activity in near real time. The EFTPS also provides additional features that allows for making up missed payments, as well as maintaining tax payments when transitioning to a new payroll service provider.
Any small business that suspects their payroll service provider is making improper or fraudulent activities regarding federal tax payments and/or the filing of returns made on behalf of their business should file a complaint with the Return Preparer Office using Form 14157, Complaint: Tax Return Prepare (PDF).