As of December twenty seventh, 2020 the Paycheck Protection Program is again, and Biz2Credit can get your small business began with a straightforward course of that can assist you get funded rapidly.
Last yr, in the course of the onset of the COVID-19 pandemic, the US authorities made a number of adjustments to how people and companies may file tax returns and pay earnings taxes, most notably delaying the due date for tax funds, introducing beneficiant tax credit, and making electronic tax filing (or e-filing) and on-line providers extra accessible and simple to make use of. The similar forms of reforms are occurring for the 2020-2021 tax yr. Small enterprise house owners must find out about these adjustments in order to accurately cope with tax preparation and pay their enterprise taxes.
In this text, we’ll concentrate on the implications of the COVID-19 pandemic with respect to small enterprise taxes and the way small enterprise house owners can navigate paying their 2021 enterprise taxes on-line.
How Has the Coronavirus Changed How Businesses Are Handling Their Taxes?
The COVID-19 pandemic induced a variety of adjustments and interventions by the federal authorities to offer reduction choices surrounding the taxes due by small companies. While this isn’t an exhaustive record, we needed to focus on some examples of how COVID-19 has affected your tax invoice.
Individual Taxpayer Deadline Extended to May 17, 2021
For small companies which are operated by a single particular person, the filing deadline was prolonged to May 17. This consists of single-member LLCs and sole proprietorships. This, importantly, does NOT embrace companies like S firms, partnerships, and firms.
Severely Impacted Businesses May Qualify for Pandemic-related Tax Credits
As an instance, the Employee Retention Tax Credit, handed in the Taxpayer Certainty and Disaster Tax Relief Act of 2020, expanded related tax credit initially handed with the CARES Act. The Families First Coronavirus Response Act (FFCRA) permits companies to get tax credit for 100% of sick-leave pay, family-leave pay, certified healthcare plan bills, and the employer share of FICA taxes for sick-leave prices.
Talking with a licensed tax skilled may make it easier to discover different tax credit that might offer you some tax reduction. This is particularly true for any coverage adjustments made to your native taxes by your native authorities or your state’s Department of Revenue. You will need to be sure you don’t miss out on any potential financial savings that might assist your small business financially.
Some Tax Relief Needs to be Paid Back
While some tax reduction packages produced everlasting reductions to 2020 tax payments, others simply delayed sure funds. Employers who elected to defer payroll taxes between March 27th, 2020 and December 31st, 2020 should pay half of the deferred quantity by the top of 2021 and the opposite half by the top of 2022. If you have been somebody who elected to make the most of one among these choices, you have to be making ready to fulfill the ensuing monetary obligations. You undoubtedly don’t need to let this excellent tax legal responsibility catch you off guard. Speaking with a licensed public accountant (CPA) may also help you make sense of what you owe and the way this deferral could influence your tax liabilities.
What Are My Online Tax Payment Options as a Small Business Owner?
Small enterprise house owners have loads of choices out there to them to make all the required funds for any taxes they might encounter.
Using IRS Direct Pay
The IRS permits enterprise house owners paying enterprise taxes by means of their private taxes to pay taxes for the Form 1040 collection, estimated taxes, and different related varieties like installment funds or extensions straight from a checking account, whether or not that be a checking or financial savings account. This on-line service is totally free, too!
The Direct Pay web site from the IRS permits funds to be made on any weekday from 12am to 11:45pm ET, and on Sundays from 7am to 11:45pm ET. The instrument additionally permits you to search for any previous tax funds you could have made so you may replace your information or reply to requests for audits.
Only two funds might be made inside a 24-hour interval and are restricted to not more than $10 million. Larger digital funds must be made through the Electronic Federal Tax Payment System (EFTPS) or same-day wire transfers.
Paying with a Debit/Credit Card
You may make your small business tax funds by utilizing a enterprise debit or bank card. Sometimes small enterprise house owners do that to maximize their money again/journey rewards related to their bank cards. But bear in mind to be cautious of the charges surrounding this. The charges charged when paying your taxes with a credit score or debit card can wipe out the profit from elevated rewards.
- Pro Tip: The charges virtually at all times cancel out any typical rewards earned by making a big tax cost however might be price it in case you are attempting to clear a big sign-on bonus threshold.
The IRS lists quite a lot of approved payment processors by means of which you can also make these transactions with clear and clear charges and comparability tables.
Paying Through the EFTPS Tool
Large firms and small companies that elect to pay their taxes as an organization, like those that are fashioned as an LLC or S company, could make their funds by means of the Electronic Federal Tax Payment System (EFTPS). You may even use the EFTPS to make employment tax funds or estimated tax funds.
You might want to arrange an account utilizing your employer identification quantity (EIN) or social safety quantity (SSN), a pin variety of your selecting, and a (hopefully very sturdy) password. Payments might be scheduled in advance and the instrument makes it straightforward to trace and archive previous funds.
Importantly, if your small business has workers, you’ll want to make use of the EFTPS system to pay payroll taxes, make federal earnings tax withholdings, cope with FICA (Social Security and Medicare taxes) and federal unemployment taxes.
Paying Through a Tax Preparer Software or Service Provider
When you e-file by means of a tax prep software program like TurboTax or a service supplier like H&R Block, they’ll typically can help you pay by means of their platform. This sort of service can have its personal types of processing prices and costs that are normally included in the worth of the general service.
The finest technique to find out about these choices is to talk to representatives on the establishment you’re planning to make use of in your tax preparation. They will be capable of present you data related to your small business and offer you an in depth rationalization of the totally different charges and prices related to their on-line tax preparation software program plans and packages.
Conclusion
Taxes are sometimes some of the troublesome elements of operating a enterprise for small enterprise house owners, and with the current adjustments and reduction packages which have been handed in the wake of the COVID-19 pandemic, issues have solely gotten extra sophisticated. As such, if in case you have elected to take any of the choices for reduction that both the federal authorities or your state or native governments have supplied, you’ll want to search skilled assist from a CPA in coping with your taxes. You will need to just be sure you are getting the entire financial savings as a result of your small business whereas on the similar time avoiding any errors that might find yourself being pricey someday down the highway.
As at all times, at Biz2Credit we’re devoted to serving to small companies, particularly throughout this attempting time. For extra vital data surrounding the pandemic and different small enterprise packages, ensure test again right here at our Biz2Credit Blog!
