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How the IRS Is Changing the Way You Make Tax Payments

If you currently use the Electronic Federal Tax Payment System (EFTPS) to pay your individual federal taxes, there is a change on the horizon you should know about. The IRS is moving individual taxpayers away from EFTPS and toward two newer tools: IRS Direct Pay and IRS Individual Online Accounts. Here is what the transition means for you and what steps to take now.

Why the IRS Is Making This Change

This shift is part of a broader modernization effort by the IRS and the U.S. Treasury. The goals are straightforward: improve security, reduce costs, and give taxpayers a better experience. Paper checks remain vulnerable to mail theft and loss, and the legacy EFTPS infrastructure is expensive to maintain. The newer tools offer stronger fraud protections, instant payment confirmation, and a single place to view your balances, payment history, and tax notices.

Calendar highlighting October 2025 EFTPS enrollment deadline

Key Dates to Know

  • October 17, 2025: New individual enrollments in EFTPS stopped. If you were not already enrolled at that point, EFTPS is no longer an option for you as an individual taxpayer.
  • Late 2026: EFTPS will be fully phased out for individual taxpayers. Even current EFTPS users will need to switch to Direct Pay or an IRS Individual Online Account by then.

Who Is Affected

These changes apply to individual taxpayers only. If you currently use EFTPS to pay your personal federal taxes, this transition affects you. Businesses, payroll providers, and trustees will continue using EFTPS for federal tax deposits and batch payments without interruption.

Tax professionals who help clients with estimated or balance-due payments should also take note, as the enrollment cutoff and 2026 deadline will affect how they guide clients going forward.

Your Two Options Going Forward

IRS Direct Pay lets you pay directly from your bank account with no fees, no enrollment required, and instant confirmation. It works well for one-time or occasional payments, including quarterly estimated taxes.

IRS Individual Online Account is a more robust option if you want to manage your tax obligations in one place. Once you create an account, you can view your balance, payment history, tax transcripts, and notices, in addition to making payments.

The Benefits of Making the Switch

The newer tools are not just a replacement for EFTPS, they are a genuine upgrade. Here is what you gain by moving to IRS Direct Pay or an IRS Individual Online Account:

  • Stronger security: Modern authentication protocols better protect your data and significantly reduce fraud risk compared to paper checks and legacy systems.
  • Instant confirmation: Electronic payments post faster and you receive an immediate confirmation number for your records.
  • Everything in one place: An IRS Individual Online Account lets you view your balance, payment history, notices, and transcripts all in one secure location.
  • No fees: IRS Direct Pay lets you pay directly from your bank account at no cost.
  • Less reliance on mail: No more risk of lost checks, mail delays, or misapplied paper payments.

What You Should Do Now

  • If you currently use EFTPS, start familiarizing yourself with Direct Pay or set up an IRS Individual Online Account before the 2026 deadline. Do not wait until the last minute.
  • If you make quarterly estimated payments, update your payment process now so you are not scrambling at a due date.
  • If you work with a tax professional, ask them to walk you through the transition so your payments continue to post correctly and on time.

The good news is that both replacement tools are free to use and designed to be straightforward. The hardest part is simply making the switch before the deadline.

Helpful Resources

Questions about how this affects your situation? Whether you’re an individual taxpayer or a business owner in the Pittsburgh, Canonsburg, and southwestern Pennsylvania area, our team at MFG Tax Services is here to help. Reach out to us and we’ll make sure your payments are set up correctly through the transition.

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Strategies for Managing a Tax Bill

If you find yourself owing money to the IRS this tax season, rest assured that several options are available to manage your tax bill effectively. Below are some steps and strategies to consider, as well as ways we can work together to reduce your tax liability in the future.

Setting Up a Payment Plan with the IRS: The IRS offers installment agreements that allow you to pay your tax bill over time. This can be a good option if paying in full would strain your finances.

Important Note: Payment plans may include interest and fees but are less costly than ignoring the debt. Late payments can incur penalties of up to 0.5% of the unpaid amount per month, plus interest. Paying as much as you can by the tax deadline minimizes these costs.

Using Savings to Cover Taxes Owed: If you have cash reserves, using savings can help avoid potential penalties and interest charges. Before drawing from savings, consider your emergency fund and overall financial goals.

Reviewing Missed Deductions or Credits: It’s worth revisiting your return to ensure you haven’t overlooked deductions or credits that could lower the amount owed. Examples include education credits, medical expense deductions, or home office expenses (if applicable). If eligible deductions or credits are found, filing an amended return may reduce your tax liability.

Exploring Additional Options: Thoughtfully withdrawing from investments may be an option. We’ll want to discuss this, identify your best option, and weigh all your options appropriately before taking action.

Looking Ahead:
To help reduce your tax liability in the future, we can explore strategies such as:

  • Maximizing retirement account contributions to reduce taxable income.
  • Adjusting withholding or estimated payments to avoid surprises.
  • Reviewing tax-efficient investment strategies.
  • Optimizing charitable giving or other deductions.

If you owe taxes or have questions about the best approach for your situation, we’re here to help. Together, we can identify the best sources to fund your payment and develop a plan to manage your tax strategy. We have resources available to minimize tax liabilities and maximize your investment opportunities. Feel free to reach out to schedule a time to discuss your options. The best time to discuss this is early, while we have time to make necessary changes.

If you have friends or family who’ve been hit with a large tax bill this year, feel free to share this with them. And if they could use help with financial planning or lowering their tax liability, you’re welcome to pass along our information or introduce us:

MFG Planners
MFG Tax Services

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through The Musuneggi Financial Group, a registered investment advisor. The Musuneggi Financial Group and MFG Private Wealth are separate entities from LPL Financial. Tax preparation services offered through MFG Tax Services are separate and not affiliated with LPL Financial, LPL Financial does not offer tax advice or tax preparation services. Insurance products are offered through MFG Insurance Services or its licensed affiliates. MFG Insurance Services and its licensed affiliates are separate entities from and not affiliates of LPL Financial.

Team Spotlight

Team Spotlight – Rodney Deloe is now a Certified Exit Planning Advisor (CEPA®)

Big news— Rodney Deloe is now a Certified Exit Planning Advisor (CEPA®)!

Rodney has earned the CEPA® Certified Exit Planning Advisor designation through the Exit Planning Institute. This certification further equips him with advanced tools and strategies to help business owners build value, plan successful transitions, and create stronger outcomes for their companies and families.

Small Business

Tax season doesn’t have to feel like a root canal!

– Rod W. Deloe, CPA

As a business owner, the “hand-off” to your tax preparer is the most critical moment of the year. Doing it right doesn’t just save your accountant’s sanity—it saves you money, reduces audit risks, and keeps your professional fees down.

Before you hit “send” on that folder of documents, here are the 5 things you should do to ensure a seamless filing:

1. Reconcile EVERYTHING 📂

Don’t let your preparer be the one to discover that your bank balance doesn’t match your books. Ensure every bank account, credit card, and loan statement is reconciled through December 31st. If the numbers don’t tie out now, they won’t tie out later.

2. Separate Personal from Business 🚫

If you accidentally put those grocery runs or family dinners on the business card, flag them now. Moving these to an “Owner’s Draw” or “Distribution” account before handing over your books saves your CPA from playing detective (and charging you for the time).

3. Review Your “Large” Purchases 🚜

Did you buy a new piece of equipment, a vehicle, or office furniture this year? Make sure you’ve set aside the actual invoices. Your preparer needs these to properly calculate depreciation and maximize your $Section 179$ or bonus depreciation deductions.

4. Categorize “Ask My Accountant” Entries ❓

We’ve all been there—you see a transaction from six months ago and have no clue what it was. Instead of leaving it blank or guessing, try to track down the receipt or add a memo. A clean ledger is a fast ledger.

5. Finalize Your 1099s 📝

Ensure you’ve collected W-9s from all your contractors and that your 1099s have been issued. Your tax preparer will need to check the “Yes” box on your return asking if you filed the required forms.

Pro-Tip: A “shoebox” of receipts is a recipe for a high bill. Digital organization is your best friend!

Business owners: What is the one thing you’ve started doing that made tax season easier for you? Let’s share some wisdom in the comments! 👇

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