Eliot Buchanan, founder and CEO, Plastiq
When Andy Schnurr paid his personal taxes last year, he didn't want to mail a cheque. So he looked for other options – anything to get around sending an antiquated, time-consuming, pen-and-paper payment.
He stumbled upon Plastiq, a San Francisco-by-way-of-Boston company that processes large payments by credit card for a fee of a few per cent. He jumped at the opportunity. Why not, he thought, cast away his chequebook and collect a bunch of reward points? He signed up.
Within months, Mr. Schnurr began using Plastiq to handle payments for his bar and restaurant, the Roy Public House in Toronto's Leslieville neighbourhood. Among other things, this included taxes. Rather than pay the Roy's corporate tax bill all at once, he started using the service to make monthly instalments.
"It helps with cash flow," he says. "Rather than paying all these numerous bills, it's one big payment to the credit card for the month."
Tax season can be, well, taxing for entrepreneurs. But tech services such as Plastiq have emerged to make life easier as receipts and bills pile up.
Plastiq's platform allows users to pay bills by credit card for services that don't accept cards directly. It charges a fee of 2.5 per cent for each payment total, but this tax season is offering MasterCard owners a reduced fee of 1 per cent for Canada Revenue Agency payments – including T2 corporate income tax returns.
"We're finding people love using their cards for convenience and rewards, and the small business crowd loves the cash flow within the no-interest period," says Eliot Buchanan, Plastiq's Edmonton-born co-founder and chief executive.
A quarter-million Canadians have used Plastiq, he says. Most of its small-business customers, he says, are avid rewards collectors who prefer to track all of their bills in the same place. Some businesses also use the service for T2 corporate tax and HST payments.
But building points quickly comes with a catch. Many credit cards cap reward-program contributions at or around 2.5 per cent of purchase totals, the benefits of which can be negated by Plastiq's service fee.
Mr. Buchanan admits that, because of the costs, "we're not for everyone." But the conveniences, he says, add up for busy entrepreneurs: "How much is your time worth?"
Plenty of business owners like it, including Mr. Schnurr, who's been able to pay for flights to Florida and Britain with rewards points. "Even if there's a service fee involved," he says, "we weigh the options." And in his case, he says, Plastiq's perks are worth it.
Other simple apps can help entrepreneurs prepare for tax season by helping out year round.
Mint, the budgeting and money-tracking app that aggregates financial information, can make owners aware of major issues ahead of time. Expensify allows employees to report expenses easily, including from mobile devices, and stores digital copies of receipts. Charitable individuals, meanwhile, might want to consider iDonatedIt, which values and keeps track of non-cash donations in a single app.
Filing electronically
The pressure is on: Canada Revenue Agency is clamping down on paper T2 tax filings, encouraging corporations to file electronically. Small business owners who want to eschew accountants have more options to file via the Web this year.
There's Intuit's best-selling TurboTax, whose T2 software retails for $200. And UFile, which has been available for personal taxes since 2000, introduced UFile T2 in 2013 after high demand from entrepreneurs who loved the service for personal taxes.
Each UFile T2 return costs $125. While the software package didn't gain much traction with entrepreneurs for the first two years it was available, its use has tripled so far this year, says Joanne Birtch, UFile's senior director of marketing and new business development. (UFile's parent company, Dr. Tax, was acquired by Thomson Reuters in 2012. Thomson Reuters is owned by Woodbridge Co. Ltd., which owns 85 per cent of The Globe and Mail.)
UFile T2, like its sister program on the personal tax side, doesn't ask users to pay until they're ready to file, giving business owners a chance to scope out the software before committing. And the program, Ms. Birtch says, makes life easier for businesses with a lot of filing to do.
"If you have an incorporated company, even if it's inactive or not tax-payable, you're required to file that tax return every year – there are a large number of companies that fall into that exact category."
Josh O’Kane