Live Q&A: Ask Financial Experts anything about how to prepare your business for tax season!

[Tom]

Hi Sellers!

On Wednesday, January 20th, we hosted a live Q&A on an important topic: taxes! We were joined by Keila Hill-Trawick and Chris Browning, a Financial Analyst and creator of Popcorn Finance podcast, who answered your questions.

We recently partnered with Chris to create a podcast on how small businesses can prepare for tax season. In the episode, Chris interviews CPA Keila Hill-Trawick with Little Fish Accounting on how to get ahead and avoid common mistakes for tax time, such as combining your business and personal expenses. They discuss how using a business debit card, such as Square Card, is an easy way to draw a clear line between personal and business expenses.

Click here to watch the full episode on the Popcorn Finance YouTube channel: Avoid This Major Tax Mistake.

A few example questions:

• Why is it so important not to combine your business and personal finances? 
• When should I start preparing for tax season? 
• What are some tax tips or secrets that can apply to any business?

How can Square Card make things easier for you come tax season? 

Square offers a business debit card, tied directly to your Square Balance, so you can instantly access the money you process with Square. 

• Use labels for business and personal expenses in your Square app to make it easy to track your business expenses and keep them separate from your personal expenses. 
• Keep tabs on your money with simplified reporting. Download a Square Card transaction report to view your expenses so you can simplify balancing your books or filing taxes.

Learn more about Square Card.

*We aren't able to address account-specific questions in this Q&A. Those are best directed to our CS team via email or the phone to keep your account secure!

Thanks to all who participated and for all of your questions!

[johnmoloney]

when will I be able to find my monthly totals for the year 2020?

[Tom]

Hi @johnmoloney, thanks for your question! To be sure we're on the same page, are you referring to your 1099-K form? If so, those forms will be available on the Tax Forms tab of your Square Dashboard by January 31st 2021.

Check out this updated post for more information: 1099-K Tax Forms and Tax Season: Everything you need to know

If that's not what you're looking for, please reply back with a bit more information and we'll be sure to get you the details you need. 

[Eddie3]

if my employees are missing hours from W2, but did get paid, how do i update it to prove they worked those hours? this was at the begining of 2020

[littlefish]

Hi @Eddie3! You’ll want to do a match of how much was paid throughout the year (and documented on the original W-2) and how much should have been paid. The IRS has a form called a W-2c which will allow you update the earnings and corresponding withholdings so that the right amounts are reported to tax agencies. It’s an easy form to file with your payroll system, or online via any one of the various systems that will allow you to process pay forms.

[Eddie3]

is it pretty easy to do? ive never had this happen to me and i just want to make sure i do it right

[Zraymatt]

Even though I did not do $20,000 in sales this year because of covid I still did some business.

Why can't I get a 1099 for my sales for tax purposes?

[Tom]

Hey @Zraymatt, thanks for bringing this up. At this time, Square does not issue 1099-K forms for sellers unless their sales meet these requirements. Depending on which state you live in, there may be different thresholds.

For a list of those states and what to do if you did not qualify to receive a 1099-K from Square, have a look here: Square Tax Reporting and Form 1099-K Overview.

Wishing you a prosperous 2021!

[littlefish]

Just wanted to chime in here to let you know a 1099 is not required, since the IRS is depending on you to report all income, whether you get a 1099 or not. Although it's not required for Square to provide one less than $20,000 (that's the IRS threshold), this may also come up if other vendors don't provide one. It won't affect your taxes one way or another if the 1099 form is not received as long as you capture everything you earn on your return.

[Tom · Accepted solution]

Thank you all for the great questions and thank you to @Popcorn_Finance and @littlefish for hosting! We hope everyone learned something new or got more clarity for their tax preparations. Be sure to check out the wrap-up video below:

Learn more: You can find more in-depth tax reporting information from Keila by checking out these episodes from her podcast, Fish Food:

• Episode 19 | How to File a 1099
• Episode 27 | Minimize Your Taxable Income With These Common Deductible Expenses
• Episode 32 | Creatives, Makers, and Cost of Goods Sold

Keep in touch! Connect with Keila at littlefishaccounting.com and follow on Instagram at @LittleFishAccounting. Stay up-to-date with the latest from Chris by subscribing to his podcast at popcornfinance.com/Podcast and follow on Instagram at @popcornfinancepodcast.

Square Card: For anyone considering a business card for managing finances — to make it easier for you to keep track of your spending, Square Card allows you to categorize your personal and business transactions. You can change the label on your card transactions from business to personal directly from your Square app or online Square Dashboard, helping you stay organized and save time. More information: Track Your Expenses by Type.

One more shoutout to all the sellers who participated! Thank you to @Liana1, @lupesaenz58, @Blayha, @StilloLLC, @Lizavila1986, @RT32B, @pessosices, @johnmoloney, @Eddie3, and @Zraymatt!