Credit Card Close Up

Paying Small Business Taxes: Three Options to Consider

If you’re like most small business owners, you groan when April rolls around. You know you have a hefty tax bill waiting for you, and it’s one you despise paying.

What’s your plan for paying that tax bill? Did you know you had options? Let’s look at three smart ways for paying your small business taxes paid with minimum stress or fees.

Method 1: The Plan-Ahead Strategy

Now, we’re not all this diligent, but if you plan now for the taxes you’ll need to pay later, you can easily set aside enough to cover the bill. Likely, your tax bill is pretty steadily the same amount each year. So use this year’s amount as a guideline for next year. How much would you need to set aside monthly to cover it in 12 months?

If you don’t have a business savings account, set one up so the money is diverted from your savings account and you’re not tempted to spend it. Look for a high-yield savings account so the interest helps you toward your financial goal.

You can also send the IRS quarterly estimated tax payments to keep from having a gigantic bill come April.

Method 2: IRS Payment Plan

If you weren’t able to set aside funds to cover your tax bill, don’t drag your feet in letting the IRS know, or you’ll pay hefty penalty fees. Instead, see if you qualify for a payment plan with the IRS. If your business owes $25,000 or less in payroll taxes, you can set up an installment agreement to stretch out your payments over several months.

You’ll pay a fee of $120 to set up a standard agreement or payroll deduction agreement, and $52 to set up a Direct Debit agreement, but it’s far less than recurring late fees.

Method 3: Credit Card

This is the least ideal method unless you have a rewards card that will essentially make it worth using a credit card to pay your tax bill, or you have a card with zero percent interest. In those cases, a credit card is actually a boon to pay your bill with.

Whichever method you choose, decide on your plan of attack before April 15 rolls around. It may take a while to set up whichever option you’re using, so start investigating now.

<a href="https://www.corpnet.com/blog/author/nellieakalp/" target="_self">Nellie Akalp</a>

Nellie Akalp

Nellie Akalp is an entrepreneur, small business expert, speaker, and mother of four amazing kids. As CEO of CorpNet.com, she has helped more than half a million entrepreneurs launch their businesses. Akalp is nationally recognized as one of the most prominent experts on small business legal matters, contributing frequently to outlets like Entrepreneur, Forbes, Huffington Post, Mashable, and Fox Small Business. A passionate entrepreneur herself, Akalp is committed to helping others take the reigns and dive into small business ownership. Through her public speaking, media appearances, and frequent blogging, she has developed a strong following within the small business community and has been honored as a Small Business Influencer Champion three years in a row.

Related Posts

A State-by-State Guide to Seller’s Permits

A State-by-State Guide to Seller’s Permits

If your business plans to sell products or services, most states will require you to obtain a seller’s permit. This seller's permit can also be called a sales tax license or sales and use tax permit. The process and fees for obtaining a seller’s permit vary by state,...

How the Corporate Transparency Act Affects Your Company

How the Corporate Transparency Act Affects Your Company

Per the recently passed Corporate Transparency Act (CTA), owners of smaller Limited Liability Companies (LLCs) and corporations will soon have another compliance requirement to adhere to starting on January 1, 2024. LLCs and corporations with fewer than 20 employees...

What Is a Fictitious Name?

What Is a Fictitious Name?

What Is a fictitious name? A fictitious name is a name other than your proper legal business entity name that you formally get permission from the state (or county) to use when conducting business. You may also see a fictitious business name referred to as: Doing...

Subscribe to Newsletter

Practical business and financial insights, lessons, perspectives, and know-how brought right to your inbox.

Thank you for subscribing!

100% satisfaction guaranteed or we will refund 100% of our service fees with no questions asked!