Tax season 2021 is here!
And if you have been adhering to our suggestions or taken advantage of the tax system in 2020 then you likely know what to expect and excited for this tax year.
On the other hand, if you’ve paid very little attention to some of the tax changes or programs then you’ve got a lot to catch up on.
Regardless of where you are our team at, LYFE Accounting specializes in business tax returns and we’re ready to help you this year.
So in this post, we want to go over 5-6 very important dates that you need to know about because they are coming up very fast.
Now let’s go ahead and start with the first deadline.
Tax Season 2021: 6 Very Important Dates to Know
1. February 1, 2021
If you have any employees or contractors (making at least $600) then you are required to send an employer wage statement by February 1, 2021.
Now a wage statement is simply something like a W2 form or 1099 miscellaneous form that you give to your employees.
And then, employees need to report their income to the IRS on their tax returns.
2. February 12, 2021
The next important date coming up is February 12, 2021, which is when the tax filing season officially begins and you can start sending in your tax returns.
3. February 22, 2021
After sending your tax returns, we should start seeing updates to the IRS tool’s “where’s my refund?” about two weeks after, which is around February 22, 2021.
4. March 1, 2021
The next date/deadline is like our own recommendation that we made up to help businesses prepare.
We recommend that by March 1, 2021, you have everything in place to actually file your taxes.
The main thing you need to have is your bookkeeping done.
You need to know in 2020, what your revenue was, what your expenses were, and current assets or liabilities you have.
But for now, we would recommend you have this done by March 1st, so your tax preparer has enough time to file your business taxes.
That is because March 15th is the deadline for businesses who are incorporated as a partnership, LLC, or S Corporation to file their taxes.
And you definitely don’t want to wait until the last minute to find out your accountant will not have enough time to get the job.
Now, what happens if you miss these deadlines?
Well, you could be subject to penalties and interest payments for missing deadlines, which is just unnecessary money that you definitely want to avoid giving away.
Even if you file an extension requesting more time, you still can be subject to those penalties or interest.
So that’s just another reason why you should not delay and try to get it done as soon as possible.
Good thing our team is available and actively helping our clients meet all these deadlines comfortably, especially now in the tax season 2021.
5. April 15, 2021
Now the biggest tax date we’re likely going to see in 2021 is April 15th because several things are due.
Firstly, after you file your partnership, LLC, or S-Corporation tax returns then April 15, 2021 is coming up for you to file your personal tax returns.
Since these entities are passed through, you’re going to get a dividend statement or K1 statement reporting how much income you made or loss so you can report it on your personal tax returns.
April 15, 2021 is also the deadline for people who own a sole proprietorship or shareholder of a C-Corporation to file their taxes.
This is more tied to personal incomes.
April 15, 2021, is also just the general deadline for all individuals to file their tax returns whether they own a business or not.
Lastly, if you have a business, then don’t forget to pay your estimated tax payments on the money you are earning in 2021 by April 15, 2021.
Remember, if you fail to make estimated tax payments then you can see some huge penalties during tax time. So just get it done.
Here’s our post on estimated tax penalties that you can read next.
6. PPP Loan Forgiveness
The last deadline we just want to friendly remind you of is that if you applied for the PPP Loan, you should also apply for PPP Loan Forgiveness.
The specific date is going to depend on your business covered period or alternative covered period.
But that’s another one you just don’t want to miss.
How to Get Prepared for the Tax Season 2021?
Now as we discussed if you have a business, the most important thing you need to have done so bookkeeping.
This is because bookkeeping can take a lot of time to complete.
We’ve been doing bookkeeping services for our clients for the last 3 years and do a pretty good job at it.
And our clients love it because we make it super easy for them and save them tons of time.
But you still can do bookkeeping on your own if you can’t work with a company like ours, so let us share with you what you need.
1. Total all your gross receipts in 2020.
In other words, you need to report all the money your business earned.
Sometimes, you may receive statements that showcase your earned income.
For example, your merchant may provide you with a 1099-K statement that reports the gross amount of all reportable payment transactions.
2. Find all your qualified business expenses or deductions for 2020.
You can read more of these qualified business tax deductions in this other post, but below is a quick summary of some of the main things you want to look for:
- Professional service expenses
- Advertising and marketing expenses
- Bank or merchant fees
- Taxes and licensing fees
- Business travel expenses
- Rent expenses
- Business meals
- Telephone and internet expenses
- Interest payments
- Business insurance
- Salaries and benefits
- Education/training costs
Once you have all your expenses, total them out and subtract your revenue from your expenses to get your net income gain or loss.
That net income gain or loss is what you will report on your personal income tax return.
Wrapping Up Tax Season 2021
We hope this post was helpful as our team is looking forward to helping as many businesses as we can this tax season.
If you have a business and need a great accountant please don’t hesitate to reach out to us this season. Contact us today!