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Why you should sign up for an online account with the IRS Thumbnail

Why you should sign up for an online account with the IRS

For starters, any topic related to taxes, even how to save on taxes, can be a little dry. That said, I’m excited to tell you why you should sign up for an account with the IRS.

View your tax payment activity.

The IRS offers multiple ways to pay your taxes now: check, ACH (at the time of your tax return filing), online via Direct Pay (pay directly from a bank, no login required), online via credit card, cash (through partners), online through a digital wallet (PayPal, Venmo), or your IRS.gov account (by linking to your bank account). There is also a system called EFTPS (Electronic Federal Tax Payment System), but I would steer individual taxpayers to the easier-to-use IRS website.

No matter how you pay your taxes, the IRS.gov website will show you your entire payment history. In addition, you can see the basics about your current tax year, such as your filing status, payments made, and back taxes owed. You can also download several years' worth of "tax transcripts."

I have been on a quarterly payment plan for about ten years now. Being able to log in and print out my quarterly payment history has been an enormous time saver.

IRS online: https://www.irs.gov/payments/your-online-account

Schedule your IRS payments.

IRS.gov has a feature that allows you to schedule payments. Want to pay your tax bill on the last possible day? Check. Your tax professional has put you on a quarterly payment plan, and you would like to schedule an entire year's payments? Check.

Setting up an online account to better manage your taxes is a mundane suggestion. I get that. But it is also one of those things you don’t need…until you need it, and when that day comes, it’s convenient to have access already.

Before you go there.

One thing to know is that the only way to log in to the IRS website is through a third-party authentication service called "id.me". The initial setup for creating an id.me account involves uploading copies of a government-issued id, authenticating your phone and email address, and allowing your phone camera to take a picture of you to validate you are who you say you are. It’s not hard, but it’s also not easy.

Here is some good news: id.me is one of the two authorized ways to access your Social Security benefits on ssa.gov.

id.me: https://www.id.me/
Social Security Administration: https://www.ssa.gov/

Bonus for California residents.

The state taxation authority in California is the Franchise Tax Board or FTB. The FTB has a similar site and the same functionality for scheduling payments and viewing payment history.

FTB Web site: https://www.ftb.ca.gov/myftb/index.asp