Square Banking Q&A: Let's talk about how Square Savings can help you prepare for tax season💰

[Tom]

Hi Seller Community,

With the 2022 tax season in the rearview mirror for many of us, we're eager to catch your questions and get your feedback on how Square Savings can help you stay on top of taxes in the year ahead!

Whether you pay your business taxes monthly or quarterly, Square Savings offers automated saving, which helps to take the guesswork out of withholding amounts, and folders, which help to organize and keep money set aside for taxes.

We were grateful to have @jmonfort from the Square Banking team address your questions and share solutions for automating healthy habits with Square Savings on Wednesday, May 4th.

A few example questions:

• How do folders in Square Savings accounts work?
• What’s the benefit of setting up an account with Square Banking versus my existing bank account?
• If I could do "_______" with Square Savings, that would help me run my business much more smoothly.

Note: We can't share specific details on our product roadmaps, though this information will be helpful as we continue to make improvements.

Block, Inc. is not a bank. Banking Services provided by Square Financial Services, Inc. and Sutton Bank, Members FDIC.

[gathertograzeco]

Just starting my business and was getting stressed thinking about next tax season. I didn't realize Square had these opportunities for us. I am a small charcuterie business but set aside a % each sale so that I can make sure I'm covered on CO state and local taxes. 

[thegrazingtable]

No way! We are also a small Charcuterie Business! Haha that is so cool I was just reading the comments and saw yours! I agree that this is a super cool way to be able to set money aside!

[KaliDava]

Looking to set aside money for Sales Tax Quarterly payments and / or Estimated Self Employment Taxes. Can we pay bills directly out of the Square Savings account or would we need to transfer to Checking or conventional bank first? 

[Hemdana]

I have the exact same questions as above

[jmonfort]

To use the funds in your Savings account, you’ll first need to make sure that the funds are in your General Savings (no longer in a dedicated folder), and then transfer the money into your Square Checking account or external checking account. You can view a tutorial on transferring here.

[HectorSed]

Hello it has been a while since this has started. As to the question you are answering, can i use funds to pay bill directly from the savings instead of square checkings? Has anything changed in the aspect?

since they are placed in folders it would be great to pay from the folder if its rent, taxes, etc. or at least from the general folder to the bill. 

[dwetzel]

Hey @HectorSed! Currently we offer bill pay functionality only from the Square Checking account. More info here: https://squareup.com/help/us/en/article/7727-square-bill-pay

You can always transfer funds from your specific folders directly to Square Checking and pay the bills from there.

If you want to pay something directly from Square Savings, you can use your account and routing number. In this case, funds are directly debited from your General Savings folder. 

You can find your routing and account numbers in the Settings of your Savings Dashboard under the Account details section.

[deebo240]

What's a good phone number to contact Square when I need it

[jmonfort]

Hello! You can reach us by phone at 1-855-700-6000.

[MarinGlass]

Too bad we haven’t been qualified for square savings for last 10 years .

maybe one day soon .

Marin Auto Glass and Wholesale 

Novato Ca with over 900k sales annually 

[jmonfort]

Hello! Square Savings just launched last summer. All you need is provide is a few pieces of information on your business. We don't look at your total sales as part of eligibility. Have you tried to open an account?

[Misael99]

How do folders in Square Savings accounts work?

[jmonfort]

Hi there! Our folders can help you plan for the next day, week, or month. You can easily separate and organize your money for business needs (sales taxes, rainy day funds), or milestone moments, like a brand-new website. When you set up your folder you have the option to set it up with or without automated savings (so a portion of each sale will be deposited into the folder), and well as with or without a target amount (so if you’re saving for a specific item/expense with a set cost you can track your progress). You can watch this demo to see how to set up a folder.

[Misael99]

How can I do the taxes and how saving 

[jmonfort]

When you open a Savings account, you can create a folder for taxes. When you set up the folder you’ll have the option to set it up with automated savings. You can choose the amount you want set aside from each sale and those funds will be deposited into the tax folder. You can adjust or pause automated savings at anytime. You can watch this demo to see how to set up automated savings.

[GregSnow44]

Every time I have tried to use the savings account I get a message my business isn't eligible. 

[jmonfort]

Hi Greg, thank you for your interest in Savings, and apologies for the inconvenience.

If you saw a message that you are ineligible due to an entity type more than 6 months ago, now we support sole proprietors, LLC, S-Corp, C-Corp, Cooperative, and partnership. You can re-apply here.

If you are still getting a message it’s not eligible, the most common reason is failure to verify information provided during the on-boarding process. We rely on third party data sources for help to verify personal and business information, such as the Internal Revenue System (IRS) and the Social Security Administration (SSA). We currently can't support multiple attempts to verify this information, but are working toward leveraging other information to expand eligibility.

(I'm seeing a lot of questions about this, so also tagging the other sellers who might be interested in following along: @Imavet, @allbutcute, @roseslate75, @Chicagosports, @Lesliealanis81, @thecrackedpot1, @SAPB, @mikeyy30, @drsstenseth, @RiceandRoux)

[roseslate75]

Thank you for the tag.  I've tried countless times to sign up.  Still unable to.  I think the most frustrating part of it is the fact that they "invite" you to sign up, then deny you.  They've had all of my information for the past years, so I'm not sure what else they would need.  Just I'll keep putting my savings in a shoe box.  

[Jermyn]

Good afternoon Tom, What would be the best way to calculate your expected taxes and sales tax pmt, so I can save the appropriate amount. 

Also what is the primary advantages of using Square over Stripe and PayPal. As I use all three. 

Thanks, Jermyn 

[jmonfort]

Hi Jermyn, great questions. Regarding how much to allocate for taxes, you’ll want to consider sales tax rates in the states that you sell, and potentially income tax depending on the entity type of your business. We’d suggest you connect with a tax professional to confirm exact amounts to set aside. That said, if you set aside a more conservative amount, you can move money from your Savings account or adjust the amount you’re setting aside anytime. Here are some articles that may be helpful:

• for processing rates https://squareup.com/us/en/townsquare/credit-card-processing-fees-and-rates and https://squareup.com/us/en/payments/fee-calculator
• and for sales tax https://squareup.com/us/en/townsquare/10-things-store-owners-get-wrong-about-sales-tax.

To your second question, Square is a business ecosystem designed specifically for businesses like yourself. We offer a full suite of banking solutions integrated with payments so all your cash flow can sync together seamlessly. While other companies may have some similar offerings, Square’s attention to detail in designing for small businesses makes for an easier, more cohesive experience that ends up saving you time. You can see how Square compares to other specific platforms here.