I used to stand in line at the post office to pay taxes, but now it takes 10 minutes online and I'm set for the year

  • When I first started paying taxes, I would line up at the post office just before the deadline.
  • Even after hiring a tax preparer who uses e-file, I still mailed a check on Tax Day — until this year.
  • Scheduling electronic payments ahead of time helps me avoid late fees and stress.
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I’m old enough that when I started filing tax returns everything was handwritten on paper forms and mailed to the IRS.

People stood in long lines at the post office for registered mail so they would have proof that their returns reached the IRS. There was a central post office branch in San Francisco that was open until midnight, and you could dash over there late on Tax Day to get that April 15 postmark.

Even after I started using a tax preparer who files my returns electronically, I still insisted on writing a check for the taxes I owed, putting a stamp on an envelope, and dropping it in the mail. In my mind, that gave me a few days of float — my taxes were technically on time, but the money was still in my account. 

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It was hard for me to part with this old school habit, but rushing to pay at the last minute adds a layer of stress to my life, and I decided to give it up this year.

In the flow of life, my estimated tax payments are easily misplaced and often late. Plus, it seems like my taxes get more complicated every year, so it’s a pleasant surprise to find a simple hack that makes tax time easier: scheduling electronic payments.

The pandemic was a wake-up call

My wife and I have to wade through mortgage interest deductions, investment 1099s, charitable gifts, and medical expenses to prepare our taxes. On top of that, I am self-employed, so I need to gather expense and income documentation from multiple sources and stay current with estimated taxes throughout the year. 

In a typical year, I’m on top of my finances, including my taxes, but 2020 was not a typical year. Early in the pandemic, my income dropped and I panicked and reduced the amount of one of my federal estimated tax payments.

By the end of the year, my income had bounced back but my wife’s had gone down — and I didn’t know how that would impact what we owed, so I didn’t make a catch-up payment. On top of that, I missed one of my estimated payments for state taxes.

I lucked out: I only underpaid my 2020 state and federal taxes by a few hundred dollars, not the thousands I worried I might owe. The penalties for not paying my full estimated taxes totaled just $3. Still, I didn’t enjoy being vague about my taxes, and I resolved to do things differently in 2021.

Scheduling tax payments for 2020 and 2021 was a breeze

In 2021, estimated taxes are due on April 15, June 15, September 15. The final quarterly payment is due January 18, 2022. State taxes for California, where I live, can be paid in four installments on the same dates as federal taxes, or split into three installments. 

To schedule my state payments, I went to the payment portal for the California Franchise Tax Board. With the paperwork from my tax preparer in front of me, I scheduled payments for the amount I owe on my 2020 return, plus the three estimated tax amounts for 2021 that she calculated for me.

At irs.gov/payments, I was able to pay the taxes I owe for 2020 plus my estimated tax payments for 2021. After scheduling those four payments, I got a message that I had reached the maximum number of allowable charges. I’ll have to log on in January to submit my final estimated tax installment for 2021.

I get reminder emails before each payment goes through

I chose to schedule my IRS payments from my bank account because there was a fee for using a credit card. My estimated payments for 2021 are $2,800 each quarter, and it makes me anxious to schedule such a large payment so far in advance. What if I don’t have enough money in my account? What if my situation changes drastically and I need to pay less in estimated taxes?

Fortunately, the IRS has my back. The agency sends a confirmation email for each payment that has a confirmation number in it. I can enter the confirmation number on the payment lookup page to view the payment details and modify or cancel it at any time. If you use IRS Direct Pay, make sure you save the confirmation emails.

When I scheduled the payments, I requested email reminders. Before it processed my first payment, the IRS sent me an email that gave me 24 hours to modify or cancel the payment. I don’t have to remember the scheduled payment or put a reminder in my calendar because the IRS will do it for me.

Scheduling my estimated tax payments may be a minor hack, but it’s taken a load off my mind. I know I’ll get my estimated taxes in on time. I’ll save a few stamps and envelopes. And best of all, I don’t have to think about my taxes again until next year.

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