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Tag Archives: Tax Returns 2021

Small Business Accounting, tax preparation

Business Tax Preparation Tips: Why You Should Do Estimated Tax Payments Now!

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By the time you read this, Tax Day 2021 is over. Millions of Americans have filed their tax returns to the Internal Revenue Service and to the state or to the District where they live. 

For many people, Tax Day meant they wrote large checks or filed extensions so they could pay off the 2020 tax bill. It was a very difficult and stressful day for millions of filers. 

You can save yourself a lot of pain, stress and fees by doing one thing differently: Make estimated tax payments as soon as possible! 

Estimated Tax Payments *** are for those whose federal and/or state withholding is under withheld during the year. Estimated tax payments are used to fill in the gap in withholding and proactively pay your predicted tax liability for the current year as you earn the money. Paying quarterly estimated payments is a strategy to avoid having to pay a huge bill on tax day along with penalty and interest that may be charged by the IRS or the state. Payments are made incrementally, on the following quarterly tax dates:

Payment Period                         Due Date 

January 1 to March 31 April 15
 April 1 to May 31   June 15
 June 1 to Aug. 31   Sept. 15
September 1 to December 31   Jan. 15 of the following year
2021 Estimated Tax Payments Schedule

 

Traditionally estimated payments are made quarterly. Had a big tax bill this year and want to avoid it next year with similar earnings predicted for this year? Have your accountant or bookkeeper calculate estimated payments. At A.K. Burton PC, we calculate estimated payments for our clients regularly. Has your income changed significantly this year? Contact your accountant and have them recalculate your estimates.

How do you pay your estimated payments? Methods of payment include scheduling an online payment or by check. If you’re interested in paying your estimated payments online: find the correct links by going to your state’s department of taxation’s website or to the IRS website and have them withdraw the funds.  Don’t have the full amount to send in that your accountant recommended? Send in the amount you can. 

A.K. Burton, PC, can do all your income tax preparation. We have experienced staff who can prepare and file your tax return and represent you before the IRS. Call us at (301) 365-1974 for a consultation. Our office is open. At this time we are not providing in-person services because of the pandemic. We serve the Bethesda, Rockville, and Montgomery County, MD area.

*** You can find out more about Estimated Tax Payments at the IRS website.   

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Income Tax Preparation: How You Can Get Your Tax Refund ASAP

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The good news is that the IRS gave us an extra month to file our tax returns for 2020. It is May 17, 2021, and not April 15, 2021. ***

The bad news is that it may take a while to receive your tax refund.

It is frustrating, especially if you need the refund to catch up on bills you may have accumulated during the COVID crisis. Here are several ways you can get your tax refund quicker:

  1. E-File: Submit your tax returns electronically versus mailing your tax return in.
  2. Confirm that you have all your income documents before you file. You should have all of your 2020 income documents by now, but if you don’t, get them before you file. If you don’t have them and file your return, then you might have to amend your return(s). 
  3. Double-check your mailing address. This one is crucial! The IRS contacts you by mail for required updates on your tax return. Make sure your mailing address is correct so that you will receive all correspondence, (including a refund check), from the IRS. 
  4. Double-check your bank information on your return. If you choose direct deposit to speed up receiving your refund but fail to provide the correct bank account information, then you won’t receive your refund by direct deposit. 
  5. Check all your ID numbers. IRS has every citizen’s name and address on file. Each name has a unique ID number that is tied to the name, birthdate, income amount, and social security number. 
  6. Confirm that you are the only one claiming your dependent(s). If you know someone who could also claim your dependent on their tax return, then verify who will be claiming the dependent(s). If a dependent is claimed by more than one person, then the second tax return to claim them will be rejected by the IRS. 

Have a Certified Public Accountant file your tax returns for you. Tax laws are notoriously complicated and change year to year. So, save yourself the stress and fees by hiring a CPA to file your taxes for you. They can file them and represent you before the IRS. What’s not to like?!

As of this blog posting, there are still a few weeks left before the May 17, 2021 posting. Have you done all of the above?

A.K. Burton, PC, can do all your income tax preparation. We have experienced staff who can prepare and file your tax return and represent you before the IRS. Call us at (301) 365-1974 for a consultation. Our office is open. At this time we are not providing in-person services because of the pandemic. We serve the Bethesda, Rockville, and Montgomery County, MD area.

*** See the IRS website for updates on the new tax return due date for 2021.

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Tax Season 2021: Get Your Tax Returns Done on Time!

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The good news is that Congress moved the date your tax returns are due to May 17, 2021! ***

The bad news is that you are still sorting out your tax return documents and haven’t filed yet or even sent the documents to your accountant! 

2020 was a year. You may be wondering, are there any special documents and information that I need to provide to my accountant to prepare my taxes? Here are a few reminders of documents and information you need to gather for your accountant:

  1. Home office deduction: Did you change jobs during the pandemic? Are you now a self-employed or an independent contractor working from home? If so, while gathering your tax preparation documents, include your expenses for your business use of home as well as any improvements made to your home.
  2. Estimated Payments:. If your income did not include federal and state withholding, you may have scheduled monthly or quarterly estimated tax payments. When submitting documents to your accountant, make sure to include the jurisdiction, amount, and date the estimated payment was made.
  3. Interest Income: 2019 tax filers who had a refund on their tax returns may have also received interest income from the IRS. (Due to delaying Tax Day from April 15 to July 15 due to the COVID-19 pandemic.) Interest payments are taxable and interest must be reported on the 2020 federal income tax return. (Minimum $10.)
  4. Charitable donation deduction:. The CARES Act allows taxpayers who file using the standard deduction to claim a limited deduction for cash contributions to qualifying organizations. The deduction cannot exceed $300. (Donated property cannot be deducted.)
  5. Economic impact payment(s): Include the amount of economic impact payment (EIP) provided by the COVID-related tax relief act of 2020 in your tax preparation documents. 
  6. Paycheck Protection Program loans (PPPL): Make sure to let your accountant know if you received a first and if applicable second round PPPL.

2020 was an extraordinary, and confusing, year for American taxpayers. We recommend that individuals and business owners consult an accountant for their tax preparation so they get all they deserve for the year most of us want to forget.

A.K. Burton, PC, can do all your individual and business tax preparation. We have experienced accountants who can prepare and file your tax return and represent you before the IRS.   Call us at (301) 365-1974 for a consultation. Our office is open. At this time we are not providing in-person services because of the pandemic. We serve the Bethesda, Rockville, and Montgomery County, MD area.    

*** See the IRS website for updates on the new tax return due date for 2021.