Freelancers, Take Note: IRS and Social Security Are Going Fully Digital by 2027

If you’re a freelancer or small business owner, there’s a critical update you need to know before filing your 2025 taxes this season. It’s now official—the U.S. federal government will require nearly all payments to and from federal agencies, including the IRS and Social Security Administration, to be made electronically.

That means the paper check era is officially coming to an end. For the 2025 tax year (filed in 2026), no paper refund checks will be issued. Instead, refunds will only be sent electronically through direct deposit. If you don’t have direct deposit information on file and no exception is approved, the IRS will hold your refund for six weeks before eventually mailing a check. And by 2027, the IRS plans to stop accepting paper check payments altogether.

Freelancers, this isn’t just another bureaucratic update

This is a major shift in how you manage your money, pay your taxes, and receive refunds. To stay compliant and avoid payment disruptions or penalties, you’ll need to get comfortable with electronic payment systems used by the IRS.

Here are your main options:

• IRS Direct Pay: Make secure, free payments directly from your bank account.

• EFTPS (Electronic Federal Tax Payment System): This system lets both individuals and businesses make tax payments online or by phone. You can schedule one-time or recurring payments through your EFTPS account.

• IRS2Go App: The IRS’s official mobile app lets you make payments and track refunds securely.

• Electronic Funds Withdrawal (EFW): When e-filing your return, you can authorize a direct debit payment straight from your account.

• Debit or Credit Card Payments: Pay through the IRS’s approved third-party processors (note that small convenience fees apply).

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Social Security Payments Are Going Digital Too

If you also receive Social Security benefits, you’re part of this transition. All payments are now required to be made electronically. You have two options:

1. Direct Deposit: The fastest and most reliable way to get your benefits deposited into a checking or savings account.

2. Direct Express® Card: A prepaid debit card option for those without a bank account. To enroll, visit www.usdirectexpress.com or call 1-800-333-1795.

   
   

Preparing Your Freelance Business

Now is the time to make sure your freelance business is ready:

• Update your direct deposit info with both the IRS and Social Security Administration.

• Verify your bank account details in your tax software or your accountant’s records before filing.

• Ask your tax professional to review your estimated tax payment plan and shift everything to electronic deposits.

• If unbanked, apply for Direct Express® now to avoid delays in receiving your payments.

This move is part of a larger federal effort to increase efficiency, reduce administrative costs, and curb fraud associated with paper transactions. Going digital means faster processing, fewer delays, and stronger security around your payments and refunds.

For freelancers, this is also an opportunity to modernize your financial systems. Transitioning to digital payment tracking will make it easier to reconcile transactions, forecast income, and keep your books clean throughout the year.

Prepare now. Starting this tax season, electronic payments aren’t just a convenience, they’re a requirement. Whether you’re paying quarterly estimates, filing your return, or managing Social Security benefits, make sure everything is set up for electronic processing to keep your freelance finances running smoothly.

If you’re unsure how these changes affect you, or if you need help setting up EFTPS or adjusting your payment workflows, reach out to a trusted tax advisor early. This proactive step will keep you compliant and stress-free when tax season hits.