Written By: Amy F Cook
As social media becomes more of a business tool, a little known benefit is the year around online resources available to individual or business taxpayers. Underestimating individual or business federal income tax is less likely if the taxpayer takes proactive stance. Instead of risking late payment penalties, cost savings can result from exploring the social media resources found on the Internal Revenue Service (IRS) website at www.irs.gov.
The IRS Calendar Connector found at @IRSnews on the IRS Twitter feed provides a tool to stay ahead of tax deadlines such as those established for quarterly estimated tax payments. In addition to the calendar connector, the IRS offers webinar training and tips on YouTube and Twitter on a variety of topics including step-by-step instructions on which taxpayers are liable for estimated tax payments. This tool can save time and money by breaking estimated tax payments into four equal payments instead of burdening the tax payer at tax time with not only the IRS bill, but the penalties assessed for underestimating tax payments.
Pay As You Go System
A little known principle of our federal tax system is that it is a “pay as you go system.” This principle is well explained on the IRS YouTube channel along with the purpose of estimated tax payments. Most Americans have automatic income deductions. However, a number of individual and business entities may need to make estimated tax payments. For example, a self-employed taxpayer, who expects to owe $1000.00 or more when filing his/her 2015 taxes simply needs to visit the IRS website to retrieve a copy of the IRS Form 1040 ES to estimate their taxes. All business owners, from small or self-employed entities to large corporations will find similar resources in IRS Publication 505. Of course, there are exceptions to every rule. A business owner paying estimated taxes may actually owe les!
s than they think, so there may be added benefits to tapping these resources. To assist in working through all the calculations, rules, exceptions and deadlines, these days, any proactive taxpayer will find IRS resources in every medium imaginable, including mobile applications.
The IRS has now launched a smart phone/tablet application named IRS2GO to reach out and stay connected to taxpayers on mobile devices. From taxpayer refund status to local free tax preparers available for in person assistance, the mobile application is one of many forms of communication strategies the IRS now uses to assist taxpayers. Even if a business now finds itself with an IRS bill for underpayments of estimated taxes, electronic applications can assist taxpayers in making payments to avoid additional penalties and interest.
Electronic Federal Tax Payment System (EFTPS)
EFTPS is the IRS secure payment system now available to taxpayers for paying estimated taxes, taxes due and/or penalties associated with a federal tax bill. Similar to a bill payment service, the EFTPS software application allows taxpayers to schedule regular online payments to the IRS. In addition, taxpayers can track their payment history and to make payments by telephone.
For American taxpayers who are intimidated by the maze of IRS rules and publications, social media is the answer to any individual or business question. Anyone who finds social media intimidating has a unique opportunity to overcome this dynamic communication barrier, enjoy the benefits, and cost savings it provides.