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2021 Tax Season: Things to Know

Business Gold Accounting Tax

The unprecedented events of 2020 have brought so much change in our lives, including our tax returns this year. Currently, due to the Covid 19 pandemic, there are a number of new and revised provisions and dates concerning the 2021 tax season. Here are some of the things you need to keep in mind.

When are Taxes Due?

Originally the tax filing and payment due date was April 15. However, the IRS extended the deadline to May 17, 2021 to give the concerned parties(tax fillers, preparers and the IRS) more time. Well, unless you choose to file for an extension, you need to file your taxes by May 17, 2021.

You may be wondering if the state filing deadlines were extended as the federal filing deadline (May 17) was. Well, each state sets its own tax deadlines. This means that you have to be keen to find out if your state filing deadline has changed to avoid any inconveniences.

Can you file for an extension to file your 2020 return?

Yes you can. The extension gives you 5 months. This means that your federal income taxes won’t be due until October 15. However, to get the extension, you need to submit your request to the IRS by May 17.

If you are owed a refund, filing your taxes late means you will wait longer to get your refund. Important to note is that the extension to file is not an extension to pay what you owe. Any federal taxes owed on your 2020 income must be paid by May 17 to avoid potential penalties.

How to File a Tax Return

Tax preparation and filing process can be overwhelming for some of us especially this year’s tax season. To make your work easier, there are 3 ways through which you can file your taxes.

  1. You can file manually by completing Form 1040. The IRS provides the necessary instructions. Once done, mail the form to the IRS, along with any payment you might owe.
  2. Tax software program or service website: There are a number of these software such as TurboTax. It will guide through a series of questions regarding your income and possible deductions. It will then fill out the form 1040 for you and file your returns for you electronically.
  3. Tax professional or accountant: These will work with you to maximize your refunds and file your tax return for you. An accountant wears a number of hats in a business, from tax planning to financial counsel. This guarantees you year round access to the financial advice you might need. The good thing with these accounting and tax professionals is that you can hire them on a full-time or part-time basis; whichever works for you and them.

You can use the first two if your accounts are not complicated. However, it is recommended to consult with a tax professional or accountant to avoid costly mistakes.

With the tax deadline for individuals extended to 17th May, 2021, there is a little more time for you to do things right if you have not filed your returns yet.

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