‘Fatal for small businesses’: Big firms delay payments to smaller suppliers during COVID-19

“Cash flow is the oxygen of their business,” says Lil Roberts, CEO of Xendoo, which offers online bookkeeping and accounting services to small enterprises.
The payment delays are “fatal for many small businesses.”

How to Pay Federal Income Tax Online

Yes, the IRS has entered the digital age! They offer several ways to pay your tax online.

Direct Pay with Bank Account

There’s no service charge to have the money taken directly from your bank. To make a payment or look up a payment you already made, go to the Direct Pay page on the IRS website. You can use direct pay service to make payments for:

Installment Agreement

1040, 1040A, 1040EZ, health care Form 1040or civil penalty

Tax Return or Notice

1040, 1040A, 1040EZ, health care Form 1040, retirement plan 5329 or tax-favored account 5329

Extension 486

for 1040, 1040A, 1040EZ

Estimated Tax 1040ES

1040, 1040A, 1040EZ

Notices CP2000, CP2501 or CP3219A

1040, 1040A, 1040EZ or health care Form 1040

Proposed Tax Assessment

1040, 1040A, 1040EZ or health care Form 1040

Amended Return

1040X or health care Form 1040

Civil Penalty

Installment agreement, advance payment or other amounts due

Offshore Voluntary Disclosure

1040, 1040A, 1040EZ or civil penalty

Offshore Streamlined Filing Compliance

1040, 1040A, 1040EZ or civil penalty

Credit Card or Debit Card

You can use an approved payment processor (listed on the IRS website) to pay by internet, phone, or mobile device whether you e-file, paper file or are responding to a bill or notice. The processor will charge a fee, which does not go to the IRS and may be tax-deductible.Note that when you e-file with integrated e-payment, the processing fees may be different. Visit the Debit or Credit Card payment page on the IRS website for more information.

Electronic Federal Tax Payment System

This option is mainly for large businesses or those who need to make large payments. It can be used to make any type of tax payment, including income, employment, estimate and excise taxes. You get 24-hour convenience plus next-level security with 3-step authentication.However, you must enroll in the EFTPS, which can take up to five business days, so it’s not a good choice if you’re trying to make an 11th-hour payment. Learn more about it on the IRS’s EFTPS website page.

Electronic Funds Withdrawal

This can be part of the e-filing process using tax preparation software or a tax professional; it is not available otherwise. The payment will be debited directly from your designated bank account.Visit the IRS Electronic Funds Withdrawal page if you have any questions.

Same-Day Wire

This isn’t really paying online, but it is electronic and thus saves time over snail-mailing a paper check. Inquire at your financial institution if they can wire your tax payment to the U.S. Treasury, and be sure to find out about their service fees and cut-off times. This may be a great option if you’re living overseas or have left your payment to the absolute last minute.To make it happen, go to the IRS Same-Day Wire page, download the Same-Day Taxpayer Worksheet, fill it out and take it to your financial institution.Don’t forget, your Xendoo tax professional can answer any questions about paying, calculating, or filing your taxes. It’s all part of our service, which takes the work and worry out of tax season and lets you get back to running your business.

 

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

2020 Year-End Checklist for Small Businesses

Every business needs a good tidying and updating at least once a year. The best time to do it is at the end of your tax year, which for many small businesses is the same as the calendar year. Get organized, review the data, and make your plans for a profitable 2020.

Weed out clutter.

Keeping old files around will only slow you down. Move anything that’s not current from your computer, desk and filing cabinet, into separate long-term storage. For digital files, it’s easy to put them on their own hard drive.

Back up all digital data.

A computer crash or natural disaster could permanently erase all your records. What a nightmare that would be! Put copies of your business files in both external hard drives and cloud-based services.

Digitize paperwork

Don’t wait until tax time to make sense of this mess. Scan tax documents to your Xendoo document storage portal and other important paperwork to a cloud storage provider. There are free resources such as google drive that offer cloud document storage. File documents according to tax year for optimal organization.

Catch up on your bookkeeping.

What you want is a summary of your annual profits and losses, which you’ll use to make decisions for the coming year. Where do you need to trim expenses? How can you improve sales? If you have accounting software, it’s been tracking the numbers, so all you need to do is generate a report.

Make tax-reducing moves.

Deductible expenditures — such as asset purchases and charitable donations — must be completed before the end of the year. (Ask your accountant for additional tax-saving ideas.) Check that you’ve made all your quarterly estimated income tax payments, to avoid incurring penalties.

Optimize your supply sources.

Take a look at the companies that sold your business products and services over the past year. Keep the ones that are doing a good job and find replacements for the ones that aren’t (late deliveries, too high prices, or whatever the problem is).

Analyze return on investment.

Retailers, identify and discontinue slow-selling products. Restaurateurs, remove non-selling dishes from the menu. You get the idea. Apply the same test to services your business uses. Does the cost of advertising justify the amount of new business it brings in? If not, it’s time to switch to cheaper media.

Work smarter, not harder.

Are you making the best use of your work time? Many small business owners get bogged down with routine tasks that could easily be delegated — or may not even be relevant anymore. As the company leader, you should be focused on activities that will move the business forward. To see where the problems lie, write down all your work-related activities and how much time you spend on each of them.

Learn from your successes.

This annual business clean-up isn’t only about fixing what’s wrong, it’s also about recognizing what you did right. Make a list of your achievements in 2019: acquiring new customers, launching a new product, receiving great reviews on Yelp, giving your employees a raise, updating your website, learning something new, etc. Now figure out how to build on those positive steps for even more success in the year ahead.

Call in help as needed.

It’s smart to know when you just can’t do it all yourself — either for lack of time or knowledge. For example, your bookkeeping may be months behind and there’s no way you can get it all caught up at once. That’s where outsourcing to a small business accounting specialist like Xendoo could be your best move. In fact, our catch-up service can clear even extreme backlogs, usually in less than two weeks.

Now that your business is all brushed up and caught up, you’re ready to ring in a new year of growth and success!

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.