Tax day for 2021 is fast approaching and while many may say, “April is months away!” with the ups and downs of the Coronavirus pandemic, one should always be prepared ahead of time. Everyone can agree that this is something we all learned in 2020.
Getting the most out of your tax return and making sure you’re filing correctly can be overwhelming. Whether you run a small business or are a self-employed, aspiring entrepreneur, hitting the mark with your taxes in 2021 can save you time, headaches, and even money. We’ve compiled a few of our best tax tips for 2021 so you can come out on top winning, and we could all sure use a win in 2021. Take a look:
1. Use a professional service to file taxes.
Filing taxes can be a headache. Preparing returns can be stressful. For anyone looking to streamline filing taxes or organizing records and paperwork, working with tax professionals who use reliable tax preparer software can help make life easy for you. They do all the hard work-whether you run a company or are just a taxpayer trying to file taxes correctly-and can save you money in the long run. Whether you’re a busy mom running a small business or work for a major firm, time-savers are money savers.
2. If you’re waiting until April to submit your tax forms, don’t. Get organized now. Some of us have been there during tax season; the months go by and before you know it, it’s April. So, you rush to get everything done to file your taxes on time. But, details fall through the cracks or you can’t find important information and your tax forms and returns are a mess. Whether you run a business or are self-employed, our best advice is get organized now and file as soon as your records and information are in order. Avoid the hassle of late payments or lost information. If you’re juggling many things at once as is common in this day and age, consider investing in a professional tax preparer to help you get things in order.
3. Stay updated on what has changed since filing taxes in 2020.
From an increase in the tax bracket to a higher standard deduction, there have been a few changes since you filed taxes last year. There are also changes having to do with a charitable deduction, and the fact that RMDs for retirement plans have been waived. Understanding these changes and if they impact you is important for getting the most out of your tax filing in 2021.
4. Choose direct deposit for your refund.
Something that 2020 taught us is that it can be beneficial to have direct deposit set up with the IRS. Those who had direct deposit in 2020 were able to receive government help quickly and with more stimulus checks being talked about, it could be beneficial to get that set up now. Plus, it will help you get your tax refund quickly and securely.
5. Are you self-employed? You can get a home-office deduction.
If you’re a stay-at-home parent who has turned to self-employment or entrepreneurship since the pandemic, you could actually get a home office deduction for the use of your home as your office. Keep in mind that this is only for those who are independent contractors or self-employed people who pay taxes. If you’re an employee who had to work remotely due to COVID-19, but receive a paycheck or W-2, you may not be eligible for the home office deduction.
Hopefully these tips will help you get a head start on your taxes for 2021, so you can get ahead of Tax Day and also make sure to get the best refund possible. Whether you do your taxes yourself or choose to work with a tax professional, remember these 5 tips as you prepare for the 2021 tax season.
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