December 15, 2021
Filing taxes for 2020 was…challenging. Yes, that’s a good way to put it. Not impossible, but not exactly fun, either. While your 2021 return hopefully won’t be quite as much of a challenge, there are still several unusual factors to be accounted for (e.g., Child Tax Credits and Economic Impact Payments).
However, there are some simple steps you can take now to help make filing those tax returns easier come January.
Gather your tax records
The best tax records are organized tax records. If your records aren’t quite there, now is the perfect time to get them together.
First, be sure to notify the IRS if your address has changed and notify the Social Security Administration of any legal name changes.
Next, you should have any year-end documents you’ve received from the IRS, such as:
Most income is taxable, including unemployment income, state tax refunds, gig economy income and virtual currencies. So, you’ll need the following documentation:
Don’t forget the other “usuals,” such as Form 1098 for mortgage interest you paid, receipts for deductible expenses, and your books and records for any business income and expenses.
Set up your online account
If you haven’t set up an online IRS account yet, do it now (you’ll find links and information at irs.gov/individuals). If you already have an online account, make sure you can still access your account. An online account is important because it allows you to securely:
If you always receive a paper check because you don’t have a financial institution, this is an excellent time to open an account at an FDIC-insured bank or an NCUA-insured credit union. That will enable you to receive your tax refund by direct deposit, which will get to you much faster than a paper check.
If you prefer not to work with a financial institution, you can even get a pay card from your local grocery store or a large retailer like Walmart and have the refund deposited to the card.
Also, check with your tax professional on a couple of important questions that may not make a difference in this year’s return but will give you a jump-start for the 2022 tax year:
In anticipation of a more “normal” tax season, the official tax deadline has reverted to April 15. So, we hope this information will get you started on prompt and easier filing.
If you’d like more information, irs.gov/filing has a library’s worth of information to help you prepare for filing your 2021 tax return. As always, our firm is current on the latest rules and regulations, and we’re available and ready to help. Here’s to a stressless tax season for us all!
Tax season for 2022 is fast-approaching, and as a business owner, you are probably interested in all of the business tax deductions you can get. Continue reading to learn the most common business tax deductions available and how to find out which ones you qualify for this year.
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