Tax Time is Almost Here!

Mar 1

It’s March and we‘re two full months into 2021! Whether you are a current or prospective business owner, there are some important dates looming on the horizon. You can probably already guess what I’m going to say: taxes! That’s right, tax season is coming. The IRS has stated that the filing season started on February 12 this year. On this day, 2020 returns will be accepted and processed. As a small business owner, I cannot stress the importance of having accurate records and taxes done each year. A prospective buyer of your establishment one day is definitely going to want to see this information.

Even though the filing date has been pushed back from the traditional end of January, the deadline to file is still April 15 (as of writing this). That goes for personal taxes and those of you who pay estimated quarterly taxes. (Quarterly dates this year are April 15, June 15, and September 17, with the last quarter of 2021 due January 15, 2022.) I discovered a handy tax calendar on the IRS website that you can use to help keep you posted on important monthly dates for payments, reporting, etc. As a business owner I find it very helpful, considering all the other things that I need to keep track of.

The IRS is reminding everyone this year that it is highly recommended that everyone file electronically. There are still some of us who like the old paper version, or maybe have a preparer who does it on paper, but due to the enormous backlog of mail from the pandemic those paper returns could take much longer to process. In fact, 90% of refunds owed are issued in less than 21 days when you have direct deposit and electronic filing!

Another couple of reminders that might be of note: first, owners who file for extensions… remember that this is just moving the deadline to file, it does NOT change the payment due date! Also, if you have employees who have worked remotely for you in a state where they do not reside, they may have to file taxes in both states. This is information that you may need to pass along.

Tax time can certainly be time consuming and a more than a little stressful. It really is important, however, to make sure that your business is keeping everything tidy and filed in a timely manner. It will help you in the short-term as far as avoiding unnecessary fees and penalties, and it helps the future of your business should you ever decide to sell one day. Good records are imperative!

Please seek tax guidance from a tax professional so that you can be aware of every option you have for your small business.