****UPDATE~The IRS has extended the filing date for United States Individuals and Businesses until July 15, 2020. If you are expecting any type of refund, it is recommended to file ASAP so processing can be completed a quickly, as possible. *****
Tis’ the season~ No, not Thanksgiving Season OR Hanukkah Season, OR Kwanzaa Season OR Christmas Season OR, in the Midwest, Deer Hunting Season~ IT IS TAX SEASON. And, it is already here for many hardworking men and women who know because of the recent 2019 tax changes, they are going to pay some serious $JACK$ for their 2019 tax bill to the IRS. With these nerve-wracking obligations looming ahead, tensions can be high.
Preparing for year-End obligations
Many small business owners have been burning the wax at both ends of their candles this year. Business was jamming and the revenue streams were pretty solid with the economy’s strong hum this past year.
The bookkeeping system did not, however, take off the way it was supposed to last January with the glowing, glistening, shiny plan of: receipt organization, bank reconciliations, financial statement analyses, and tax planning with the accountant in February.
In reality, the receipts are overflowing from a leather organizational box tucked “not-so-neatly” in a file drawer, the monthly bank reconciliations ended in February AFTER the accountant contact call was COMPLETELY forgotten to be placed, and the STRESS of the holidays is heavily breathing down the necks of all small business owners (far and wide) as they are preparing to close out the year, with hopeful ambitions of seriously ramping up revenues over the next 2 months.
“UH-OH!” is generally uttered at least 15 times (or some other choice phrases) as the thought of tax preparation looms ahead after the ringing in of the new year in a few, short months.
Cleaning the books in accounting
As always, one MUST get a handle on the books by either inputting all of the necessary data into an online accounting software (Quick Books Online, Sage, Freshbooks, Zero) or a relatively new desktop version, OR hire a professional bookkeeper.
(Unfortunately, at this stage of the game, be prepared to pay a fairly hefty price for 10-12 months worth of accounting to take place. And, if your books were a mess last year the bookkeeper will have to charge you a “clean-up fee”, as well, to get you moving in the right direction.)
Next, on the list is to CALL THE ACCOUNTANT, preferably, a Certified Public one (CPA), because he/she will know exactly what to do with what you have to present to them (all of your documentation.)
Now, if like most every other busy, well intentioned, booty-kicking small biz owner, the hot and hefty, fast-flowing, lava-like revenues, more than likely, created some net profit for the owners/members of the company.
This glorious, hard-earned MAGIC NUMBER is where the tax liability will come into play for federal and state agencies
After the CPA works his/her necessary calculations through research-based formulas and the multitude of tax tables in their software, your TAXES OWED (tax liability) will be disclosed to you.
It is at this point, most biz owners have already bitten off most of their fingernails, paced a six inch hole into the lovely, grayish tan berber accounting firm’s carpeting, and very seriously considered drinking an entire bottle of wine before, and after, this particular appointment.
How to Get Money Quick
As a business owner, you will be responsible for your share of the tax liability owed. And, it will be due, NO LATER THAN, April 15. (If your number is beyond comprehension, it would be at this point, your tax professional (the CPA) will, more than likely, recommend an extension OR a payment plan. But, it is always MOST IMPORTANT to file the taxes BEFORE either of these options are considered.
But, let’s say you do not want to “kick the can down the road” to see it rear its ugly head in a few months asking for the same amount (plus late fees), nor do you want to use the IRS as a loan officer and pay them a late fee and interest on the tax liability amount owed. So, some targeted strategy is going to be necessary.
Some Sure-Fire Ways to Find Cash Quickly
- Check all of your asset cash accounts for money you could pool together to pay the tax bill. Examples: savings, checking, reserve, money markets, annuities (if old enough), stocks, bonds, or savings bonds.
- If you have some time, reduce spending to only areas that are needed and use the surplus to pay down the debt.
- Sell off any assets (small or large) which you do not need any longer. (Motorcycle, 4-Wheeler, Camper, Boat, Designer shoes/bags, golf clubs, jewelry.)
- Look to life insurance policies, savings accounts, certain retirement accounts to take a loan against.
- Look for a low interest credit card to put the tax debt on.
- Look for an unsecured personal loan with a local bank, credit union, or online bank
- Borrow from a friend or family member whom you can, preferably, trust to not blab all over town of this said loan.
- Certain side hustles can generate funds rather quickly. (Some quite popular side incomes come from: driving others around, taking care of pets, watching children, renting out a room, using occupational skills to earn extra income.)
- Probably the BEST WAY to pay off tax liabilities for NEXT YEAR is to set up a tax planning session with a CPA (ASAP) to project a number for the following tax year’s filing.
If you are need of some additional financial wellness resources or would like to speak with a Financial Wellness Guide, leave a comment below and we will get back with you ASAP to help you get headed in the best direction for you and your current financial situation. We always offer a free, video conferencing consultation, too:)
Also, if you scroll to the bottom of this page, you can grab your quick and easy “2019 Tax Budgeting Cheat Sheet” to assist with your tax payment planning.