Taxes in February? You bet. It's the optimum time to file-if you're due a refund. The IRS is less busy now, so rebates are expedited. And the sooner you get what's coming to you, the sooner you can put that money to work. So why wait?
Even if you expect to owe taxes, it's not too soon to prepare your returns-it will help you and your accountant when he or she is bogged down in the March/April rush. But if you do owe, hang on to the forms and your payment until the deadline (this year, Monday, April 16). Keep that money working for you.
Keep in mind, too, more and more business owners are filing their taxes via telephone or PC, thereby reducing paperwork and the cost of collecting taxes. The electronic system in place, dubbed Electronic Federal Tax Payment System (EFTPS), has been pushed by Congress and a number of states.
Nearly 3 million businesses already file through EFTPS-is yours one of them? If not, consider the potential benefits:
- The system is much less burdensome than writing checks, getting signatures on them and making last-minute trips to the bank. You'll save the expense of couriers, checks, stamps and envelopes, in addition to staff time required to make tax payments.
- The service is free if you select the debit method, which allows the IRS to withdraw payments directly from your bank account. (If you choose the credit method, requiring the bank to initiate the fund transfer, your bank may impose a fee.)
- After enrolling in the program, you can use the system 24/7, and you can schedule a payment up to 30 days in advance.
- If you wish to use a PC, free Windows-based software is available from the IRS.
- For additional information, check out EFTPS online or call (800) 945-8400.
Paul DeCeglie, a freelance business writer based in Los Angeles, is a former reporter for American Banker and Journal of Commerce.