| Here's the latest version of the age-old story, | | | | to do it on time. And using EFTPS definitely is |
| "The Tale of Two Small Business Owners." It | | | | easier and faster than writing out a check and |
| goes like this: Small Business Owner #1 is 31 times | | | | taking it to the bank. You simply sit down and |
| less likely to be penalized by the IRS than Small | | | | make a 5-minute phone call, or visit the IRS |
| Business Owner #2. | | | | website and input a few numbers. No fuss, no |
| Hmmm. What gives? What is the difference | | | | muss. And you can do it 24 hours a day, 365 |
| between these two chaps? It's simple, really. | | | | days a year. |
| Small Biz Owner #1 makes his federal tax | | | | I know, I know. Change is painful. You like your |
| payments electronically, using the government's | | | | routine. |
| Electronic Federal Tax Payment System (aka | | | | My 3 children like to tell me how "old-fashioned" I |
| EFTPS). Small Biz Owner #2 makes his federal | | | | am -- because of the clothes I wear or the music |
| tax payments manually, using good old paper 'n | | | | I listen to. I hear it all the time: "You're so '20th |
| ink to write the check. | | | | century', Dad." |
| Not only that, but for his monthly payroll tax | | | | Well, I'm hear to tell you...making your tax |
| payments, Small Biz Owner #2 has to fill out the | | | | payments with a manual check is soooo "20th |
| little coupon that comes in that little yellow coupon | | | | century", man. Get with the times and start using |
| book (known as Form 8109), write out the check, | | | | EFTPS. Not only is it "hip, man" -- but it can also |
| and then take the time to visit his local bank and | | | | help you avoid a hefty late payment penalty. |
| make the payment in person. | | | | One of my clients with a staff of 4 employees |
| Because Small Biz Owner #2 is stuck in the rut of | | | | recently forgot to make one of his monthly |
| the manual check payment routine, he is 31 times | | | | federalpayroll tax payments. During my quarterly |
| more likely to get hit with a late-payment penalty. | | | | review of his books, I informed him of the |
| And these late payment penalties are pretty | | | | missing payment. |
| steep: 1 to 5 days late = 2% penalty; 6 to 15 | | | | On a tax liability of just $2,000, he was now |
| days late = 5% penalty; 16 or more days late = | | | | faced with a $200 penalty. Ouch! |
| 10% penalty (plus interest). | | | | Ready to join the 21st Century, and avoid the |
| It makes sense, doesn't it? If a task takes less | | | | pain of an unnecessary tax penalty? Then sign up |
| time and energy to complete, you are more likely | | | | for EFTPS. |