Making a List and Checking It Twice: Everything You Need for a Successful Tax Day
Updated: Jan 14, 2021
At CPA by Choice we want you to be prepared for the 2021 tax season. Some things will differ from your prior return, for example in an effort to encourage Americans to donate money to charity during the coronavirus pandemic, the CARES Act enabled taxpayers to deduct up to $300 in monetary donations in 2020 – even if they take the standard deduction. There are other changes for the 2021 tax season, we will ensure that the credits, deductions, and contribution limits available to you are applied.
To help you have a smooth and successful Tax Day we have put together a checklist for you.
Here is what you will need:
Find out when your taxes are due. The day designated by the United States government as the day taxes are due each year is April 15th. In 2020 that deadline was extended due to COVID-19, for now 2021 taxes are still scheduled for the standard day. However, given the ongoing pandemic, there is a chance that the tax-filing deadline will be extended.
File the right tax form for your business. The type of form you will need depends on your type of business. For example, if you are an S-Corporation you will need to file Form 1120.
Gather general information. You will need the legal business name, business address, EIN (employer identification number), and social security number.
Gather your expense receipts. Your expense receipts will support the expenses you will claim. Business expenses are the cost of carrying on a trade or business, some examples include employees’ pay, rent expense, insurance, and interest.
Provide bookkeeping records. You will want to have on hand your profit and loss statement, balance sheet, and cash flow statement.
Put together a list of items your business is eligible to deduct. If you use your home as your business location, you may be eligible for the home office deduction. In addition, if you have a business vehicle you will need some of the costs associated like fuel, lease payments, interest, maintenance, etc… There may be other deductions you are eligible for such as uniforms, health care, and charitable donations.
File an Extension. If you already know that you will need an extension, you should request an extension of time to file sooner rather than later so that if anything goes wrong with the application you will have time to fix it and resubmit it prior to the original due date of your tax return.
The 2020 pandemic may complicate filing taxes in 2021. At CPA by Choice we have the answers to your questions and we are staying up-to-date with all Internal Revenue Service guidelines. Our goal is for our clients to focus on what matters most in their lives, and for us to handle the taxes, reporting, and accounting. Please call us/message us and allow us to handle your 2021 tax season.