Tuesday Tip: How to Turn Tax Payments into Opportunities with Plastiq
Many businesses regularly use Plastiq to pay their taxes so that they can take advantage of the benefits that credit cards offer. If you own a business, here’s why paying your property, payroll, income and other taxes with Plastiq might make sense for you and your business.
First, paying by credit card effectively gives your business a short-term loan on its taxes. This float can provide up to 60 days of extra time to pay your bill, depending on when the payment is made and where the due date falls. It’s interest-free so long as the balance is paid in full by the due date. A one-month loan at 0 percent interest may be used to maintain higher financial reserves, better manage cash flow or a range of other purposes. Check out our post on credit card float with a calendar outlining how to best take advantage.
Earn Points on Credit Cards
Second, many businesses pay taxes with Plastiq so they can collect credit card rewards. Credit cards might offer:
- Cash back on the total amount paid
- Miles that can be used for travel
- Points that can be used to make other purchases
In many cases, the rewards offered by credit cards either substantially reduce or effectively eliminate the nominal fees charged for using Plastiq.
Reach Sign-Up Offer Minimums
Some business owners really maximize the potential of general bill pay with credit card by taking advantage of sign-up offers. Offers normally give significant bonuses for reaching certain spending amounts soon after opening a card. Many will give tens of thousands of points or miles to business owners who qualify.
Because taxes are such a significant expense, they’re an easy way to reach cards’ minimum spending requirements and get the corresponding bonuses. Paying just one quarter’s or year’s taxes on a new card might net you points or miles totaling in the tens of thousands or more. A few situations can earn points in the hundreds of thousands.
Reduce the Effective Cost of the Plastiq Fee
Finally, the small cost of using Plastiq can be further reduced by claiming the fees as a business expense. No matter what type of business taxes Plastiq is used to pay, the charges can be deducted as a business expense that reduces your overall tax burden. Depending on how a business is structured and taxed, this deduction alone can be quite beneficial. (Fees charged for paying personal taxes are usually a personal tax deduction, as opposed to a business deduction.)
Turn Taxes into Opportunities
No one likes paying taxes, but they’re a necessary aspect of business. With Plastiq, you can turn every tax payment that your business has to make into an opportunity. Improve your cash flow, earn points, get bonus offers and claim a tax deduction all by simply using the secure and easy service to make your business’ pay property, payroll, income and other taxes.