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Are There Tax Extensions Available for Businesses Filing in 2021?

Are There Tax Extensions Available For Businesses Filing In 2021?

Filing income tax returns and paying taxes is not something most small Business owners or sole proprietors enjoy doing, but it is something that every entrepreneur must do. Understanding the obligations that apply to your business, including which forms you must file and when you need to file them, can help you plan ahead to meet these requirements and reduce the stress that can come with waiting until the last minute to do so. Here, we discuss 2021 tax deadlines and extensions for small businesses.


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Will the business tax deadline be extended in 2021?

In 2020, individuals and Business Owners had an automatic extension of time to file their tax returns for the 2019 tax year and to pay any taxes owed, with the deadline pushed back to July 15, 2020. This extension was given to help ease the financial stress brought by the COVID-19 pandemic.

While the IRS and Congress have enacted certain laws and rules designed to help small business owners and other entrepreneurs who are still struggling as a result of the pandemic, such as Paycheck Protection Program (PPP) loans, the annual income tax filing deadline has not been extended. This means that most small business owners are expected to file their 2020 income tax returns and pay any outstanding amounts owed no later than March 15, 2021 for partnerships, multi-member LLCs, and S-Corporations, or April 15, 2021 for C-Corporations with a 12/31 fiscal year end, single-member LLCs, and sole proprietorships.

What is the extended tax return deadline for businesses hurt by the severe winter storm in February?

The tax filing deadline was not extended in 2021. However, some small business owners were granted an extension of time to file and pay due to the severe weather that impacted certain states in February 2021. Covered business owners now have until June 15, 2021 to file their 2020 tax returns, including returns that were originally due on March 15, 2021 or April 15, 2021.

This June 15, 2021 deadline includes year-end income tax filings, quarterly estimated tax filings for Q1 2021 that would have been due on April 15, 2021, and quarterly payroll and excises taxes due on April 15, 2021.

Which states are covered by the winter storm tax extension and who will qualify for it?

Business owners in states for which the Federal Emergency Management Agency (FEMA) issued a disaster declaration in the wake of the unprecedented winter storms are eligible for this tax deadline extension. These states include Texas, Oklahoma, Louisiana, and certain counties in Mississippi.

Businesses and sole proprietorships in these states are automatically covered, as are those with IRS addresses of record in other areas under FEMA disaster declarations. The IRS has also indicated a willingness to work with and extend relief to entrepreneurs in other areas not automatically covered but whose tax records are in a covered location.

How do businesses not covered by the winter storm tax extension file for regular tax extensions?

If your business is not covered by the IRS tax filing extension related to the February 2021 winter storm, you can still get a six-month extension of time to file your return. So, if your return due date is March 15, 2021, an extension will give you until September 15, 2021. Those with April 15, 2021 due dates can have until October 15, 2021 to file their 2020 year-end income tax returns.

To obtain an extension of time to file, visit the IRS website to locate and download the appropriate form for your business and filing type. You can also file an extension request electronically when paying part or all of your estimated taxes using the IRS Direct Pay, Electronic Federal Tax Payment System (EFTPS), or when making payments to the IRS using a credit or debit card.

Understand that an extension of time to file is limited to the return filing obligation. The IRS still expects you to pay any taxes owed by the original filing due date (March 15 or April 15, depending on your business entity structure.) Failing to pay your expected tax obligation by these dates can result in penalties and accrued interest on any unpaid amounts.

How can business owners get help related to their business tax obligations?

Taking a proactive approach to your small business tax filing and payment obligations can help ensure you don’t incur tax penalties or make unnecessary interest payments. Working with a tax attorney or accounting professional can provide peace of mind. If you have questions about tax filing requirements applicable to your small business or want help understanding tax filing extensions, ask a lawyer for fast and affordable guidance today.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

The post Are There Tax Extensions Available for Businesses Filing in 2021? appeared first on Rocket Lawyer.



This post first appeared on Rocket Lawyer - Everyday Law, please read the originial post: here

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