As we approach Tax Day for individual filers (corporate filers were still required to file on April 15th), it’s important to review a few details pertaining to this filing season.
Federal Income Tax
Monday May 17th is the last day to file your federal income taxes unless you reside in Texas, Oklahoma or Louisiana. These states were granted an extension to June 15 due to the February winter storm. If you have already filed your 2020 return, here are some other items to consider.
Monday, May 17th, is the last day to make contributions to:
- IRA, Roth IRAs,
- Health/Medical Savings Accounts (HSA, MSA),
- Education Savings Accounts (ESA),
- Solo 401(K)
- Simplified Employee Pension (SEP) IRAs
Additionally, if you haven’t filed your return and think you will need additional time, you can receive an extension to October 15th, but the request must be submitted by May 17th. Please note, an extension of time to file does not extend your time to pay. Any tax or estimated tax amount due needs to be paid by May 17th or it will be subject to penalty and interest. This will also be the last day you can file an amended return for the 2017 tax year.
State Income Tax
The states listed below, and the District of Columbia have a May 17th deadline to file state income tax returns. As always, please review your individual state guidelines for specific filing details.
North Carolina D.C.
The U.S. Treasury Department, as a result of the Covid-19 epidemic, provided a series of stimulus checks to qualifying individuals. If you received any of these payments, fear not, they are considered an advance of tax credit. What does that mean for you? It means they are not taxable and do not count towards your taxable income.
As part of the CARES Act, individuals were able to collect an additional $600 per week in unemployment insurance benefits (UI). While this was a much-needed lifeline for many it also may increase your tax liability. Unlike the stimulus payments, UI is considered taxable income. Realizing this burden, relief was provided with the exclusion of the first $10,200 of UI benefits for individuals making under $150,000/year.
If you received any type of business grant, this money is typically considered taxable income and you should plan accordingly for any tax liabilities.
If you took out any business loans during this period, good news, business loans are not taxable. They are considered liabilities and are not counted toward your taxable income.
We want you and your business to thrive and that includes staying up to date with tax codes and deadlines to ensure your business stays compliant and penalty free.
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Rick Bromund heads the tax research team at ComplYant, a technology platform offering business owners and entrepreneurs a simple way to manage tax rules and requirements. Rick is an experienced professional in the tax industry and has previously held positions at Fortune 500 companies as well as one of the big 4 accounting firms.