Published on 11/04/2021
The window for filing Taxes has been extended to May 17 amid all the changes in the tax law due to the pandemic. The extension is a blessing, especially for people reeling under unemployment and those trying to make last minute savings before the deadline creeps up on them.
However, it is advised that you start your tax planning early to save both time and resources. Remember, the Tax Filing process can be tricky this season with people claiming unemployment benefits, working multiple jobs, and receiving stimulus payments. It will be beneficial if you start early and finish all the paperwork well in advance.
Here’s how you can plan for it efficiently.
Organize your documents
Start the process by collecting all your financial records and documents in a single file. This will save you time and from the panic from running around looking for documents at the last minute.
One important document that you should have is a copy of your last year’s tax return. This will help you gauge all the documents that are needed to file your next tax return. Some common documents that you should have are your W-1 and 199-NEC forms if you are employed or self-employed. Those who are unemployed should have their 1099-G form ready with them while students should ideally keep their 1098-T or 1098-E statements with them.
Regardless of your employment status, keep the 1099-DIV, 1099-S, 1099-MISC, or the Schedule K-1 with you if you are an investor. If you are going to seek a rebate owing to the charitable donations you made, keep the paper proofs for it ready with you before doing your taxes.
Retired citizens should be having their SSA-1099 forms and 1099-R forms with them when filing their taxes. If you have received your stimulus payments on account of the pandemic, keep the Notice 1444 and Notice 1444-B ready with you.
Look out for big tax changes in 2021
With the coronavirus pandemic came unemployment benefits, stimulus payments, and other government aid for those worst hit by the crisis. All this amounts to key changes in the tax filing order.
If you have not received your stimulus payment until now, you can stake a claim for it in your tax return. Based on the amount that you had to get in your stimulus check, you will be compensated with either a lower tax amount or get an increased tax return.
Take a look at your Notice 1444 and Notice 1444-B to know the amount that the government owes you.
You will also have to pay taxes on the amount you received as an unemployment benefit. For this, refer to your Form 1099-G while doing your taxes.
Hire a CPA or do your taxes yourself
You can choose to file your taxes on your own or hire an accountant to do all the toiling for you. You may opt for using online tax software to compute and file your taxes if it is not too much of a hassle for you. In other situations, one may hire a tax professional to do the job without any hiccups.
Small businesses, proprietorships, and freelancers are suggested to hire an accountant to do their taxes. Professional accountants can not only do the job faster for you, but they can also suggest ways to minimize your tax amount and recommend ways to claim most of the deductions. MyTaxFiler can help you with all your tax filing requirements.
Online Tax Account
To obtain all your tax documents in a collated manner, it is recommended that you create an online tax account with the IRS. This way, you can access your past tax forms, documents, financial records, and even set up payment.
The process is also the safest, given the pandemic spreading like wildfire. You no longer have to walk into the IRS office to access any of these.
Pay due taxes before May 17
The best way to live stress-free is to get everything done now. Your best option is to do your taxes, file, and pay them as soon as you can and not wait for the May 17 deadline to crop up.
Also, the deadline may have been extended to May 17 for individual taxes; the deadline for estimated tax payment remains April 15. You must pay whatever amount you can by April 15 to reduce the penalty on the amount you pay after April 15.
Doing your taxes can seem like a daunting task. You can rely on experienced tax professionals to do the scut work for you while you relax this tax season. Talk to MyTaxFiler’s qualified public accountants for more information!