Your questions about the 2020 tax season have been answered

Your questions about the 2020 tax season have been answered

Your questions about the 2020 tax season have been answered

The tax season is approaching, and this year is a bit different.The deadline for filing federal tax returns is Delay By February 12, 2021, the IRS will be allowed to test its system after changes in tax laws related to the pandemic. Ah, pressure! But wait.In March of this year, the U.S. Internal Revenue Service announced Extension of personal tax day (Including those who pay self-employment tax) through May 17, 2021. call!

Nevertheless, there are still many questions about stimulus checks, PPP loan exemptions, and when to issue refunds. As you prepare your small business tax return, we will answer your urgent 2020 tax season questions.

When is the last date to submit the 2020 tax return?

As mentioned above, you must submit 2020 taxes by May 17, 2021.

However, even with this extended deadline, it is wise to file your federal income tax return as soon as possible, especially if you need a refund. If you submit electronically, most refunds will be issued within 21 days.

If you need additional time, you can apply to extend your application to October 15, 2021 Form 4868 (Although this will not extend the time you have to pay any taxes due).

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Please note that application extensions only apply to federal returns. You still need to file state tax returns on time. This is an unstable situation, so please consult your state to see if they also plan to extend the submission deadline.

How to calculate my tax refund?

If you have not prepared your taxes, most tax preparation companies will provide a tax return calculator.have Tax accountant From TurboTax, H&R Block’s Income tax calculator, Nerd wallet Federal Income Tax Calculator, And more. You don’t need to subscribe to their tax service to use each of these tools, just enter some detailed information about your income, expenses, etc. to make an estimate.

Where is my refund?​​

If you are eligible for a tax refund for taxes paid in 2020, you can track your IRS refund status through IRS Where is my refund?​​ tool. This information is usually provided within 24-48 hours after the IRS accepts your electronic declaration. Enter your social security number or ITIN, application status, and exact refund amount to update. Refunds are usually approved within approximately two business days, and refunds are made approximately 20 days later.

When will I receive a stimulus test?

The stimulus check has nothing to do with your tax refund, but if you are eligible for the third round of payments under the $1.9 trillion rescue program, you can Track your incentive payment status via IRS. Payment will be based on your 2019 federal tax return. You should be able to check your eligibility, payment status and whether you will receive it electronically or by mail.

I received a PPP loan. How does this affect my tax return?

If you obtained a Payroll Protection Program (PPP) loan under the pandemic response legislation in 2020 to allow workers to continue to receive wages during the pandemic, it is important to know whether your loan is tax owed. This is what you need to know.

  • PPP loan relief: PPP loans may be forgiven, Which means that they are essentially grants, but only if at least 60% of the loan is used to pay employees’ normal wages within 8-24 weeks after the loan is approved. The remaining 40% can be used to pay mortgage interest, rent, operating costs and other expenses (although they cannot be used to pay business taxes).
  • How to apply for PPP loan relief: To obtain forgiveness, a company must complete a PPP loan forgiveness application and submit it to the lender.Employers may also be eligible for part of Forgiveness, for example if wages have dropped slightly or the number of full-time employees on the payroll has dropped.
  • PPP loans and your taxes: It is important that if a PPP loan is exempted, it is not considered taxable income and is tax-exempt. In addition, any expenses paid with loans can also be written off as regular business expenses in your tax return.
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To help you better understand the tax implications related to PPP loans, please read: How does PPP loan affect your taxes?

Also, if you are looking for additional funding for your business and are curious about PPP loans, please know that sole proprietors and independent contractors are now eligible. Indeed it is. Don’t let the “salary” in your name fool you into thinking that you are not eligible for this forgivable loan. In fact, since you don’t have the number of employees, payroll, and benefits to calculate, your application process (loan and subsequent forgiveness) should be much simpler. Learn more About how much money you can borrow, what you can use the PPP loan for, and what you need to apply for.

Is it too late to file taxes in 2019?

Yes 2019 tax filing deadline It is July 15, 2020 (postponed from April 15 due to the pandemic). For those who cannot submit before the earlier deadline, you can use the automatic extension before October 15, 2020.

However, The IRS has not processed more than 2.4 million personal income tax returns for 2019. If you are in this number, please continue to use IRS to check your refund status Where is my refund?​​ tool. If you are eligible for a 2019 tax refund, you must apply before July 15, 2023.

More tips for the 2020 tax season

For more tips on the 2020 tax season, including how to cancel your home office and any related purchases, COVID-related payroll tax deferrals, etc., please check 8 tax tips for small business owners during COVID.

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In addition, when you are ready to pay taxes, here are Four things you should do for your final tax preparation.

Fundbox and its affiliates do not provide tax, legal or accounting advice. This material is for reference only and is not intended to be provided and should not be used as a basis for tax, legal or accounting advice. Before conducting any transaction, you should consult your tax, legal and accounting advisors.

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