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What are Estimated Tax Payments and Tips for Paying Them!

Everyone is required to pay taxes on the income they received during the year. But if you’re a business owner, independent contractor, self-employed, or receive income from other sources, the IRS requires you to pay quarterly estimated tax payments throughout the year. Read along to find out tips for paying estimated taxes.

What Are Estimated Tax Payments?

Estimated tax payments are a way to pay tax on income that is not subject to withholding tax. The IRS requires you to pay four quarterly installments, and if you underpay your payments, you will have to pay more when you file your tax return. Each payment has a specific deadline, and the four installments must be made on:

  • April 15
  • June 15
  • September 15
  • January 15

How to Make Estimated Tax Payments

If you’re not sure how to determine how much you need to pay, the IRS Form 1040-ES is used to calculate and pay estimated tax payments. Another way to get an idea of what you will owe each year is by looking at your income, deductions, credits, and liability. The IRS allows you to paid your estimated tax payments with a credit card or debit card. These payments can be made online or over the phone.

Pay On Time

Make sure you’re paying on time, and if you’re missing any of your quarterly estimated tax payments, you can be hit with costly penalties and interest fees. If you’ve missed any of the installments, pay them off as soon as possible or before the end of the fourth quarterly payment.

Hire an Accountant

Hiring a CPA to help you make your quarterly estimated tax payments is the best decision you can make for your business. They will make sure all your forms are in order and submit your payments on time and correctly.

Being a business owner is already stressful on its own, and having to keep up with estimated tax payments can be complicated and frustrating. Hiring experienced accountants from Calabrese & Associates, P.C., to assist with making tax payments will help you focus all your time and energy on your business operations. Visit our website today to get started!

When You Could Benefit from Hiring a Local CPA

Tax season isn’t the only time you could benefit from hiring an accountant. Whether you’re looking to plan your retirement, save more money, build a college fund for your children, or manage your investments, our accounting professionals are willing and able to help. Read on to learn more about the benefits of hiring a local CPA.

Top Reasons to Hire a Local CPA

To Save Money

This is the number one reason you could benefit from hiring a local CPA! A skilled and experienced accounting professional knows how to guide you in making the right financial decisions so you can keep as much money as possible in your pocket.

 

To Save Time

We all live busy lives, and you may not have the time to sit down and thoroughly go through all your important tax documents. When you hire a local CPA, they will work with you and cut down the time it takes to file for your tax return and do the job effectively.

You are Self-Employed

For those who are self-employed or own a business, the IRS requires you to make quarterly tax payments. An accountant will ensure that all forms are filled out correctly and on time.

Improve Credit Score

Do you have a low credit score that’s holding you back? Don’t worry. It’s never too late to fix it! Student loans, credit card debt, and high spending habits can cause a low credit rating. Your local CPA can teach you a few easy ways to boost your credit score.

Saving For Your Kids’ Future

As a parent, you may want to contribute to your children’s college savings account.  Our team of experts will assist you in setting up a college savings account and show you tools to plan accordingly so that you can save as much as possible for your kid’s future.

Start a New Business Venture

Are you looking to start a new business but not sure how to get started? Business accountants will work with you one-on-one to make sure you are prepared to start off on the right foot.

Purchase Real Estate

Whether you’re buying or selling a house, you may have questions and concerns regarding mortgage, capital gains, and deductions. There are also specific tax situations regarding owning and renting a home and an accountant can help manage the expenses and the taxes of your real estate properties.

You Have Investments

Investing your money is a great way to boost your savings, whether it’s in stocks, bonds, or real estate. A CPA will help advise you on making the best decisions on your investments so you can make some extra money for your future retirement.

Hiring an accounting professional is a great way for you to save time and money! If you’re looking to find a qualified and experienced local CPA, the professionals at Calabrese & Associates, P.C are here to help. Contact our team of experts today to get started!

How to Prepare for Your Tax Extension Deadline

After the past year, we’ve had, you may be behind on filling for this year’s tax return. If you filed for a tax extension, you have until October 15, 2021, to submit all your forms. Even though that may seem far away, it will be here before you know it, so make sure to start preparing now! Read on for a few tips to help keep you on track before your tax extension deadline.

Steps to Take after You’ve Filed for a Tax Extension

Check Tax Extension Status

If you submitted Form 4868, it’s recommended that you check your tax extension status to make sure your request has been granted, so you don’t get hit with penalty fees. For those who mailed in your extension, you will need to call the IRS customer service number to confirm that your tax extension was received and approved.

Organize Your Tax Documents

Before you start preparing your return, take the time to gather all your important documents, including a W-2 Form, 1099 Form, and receipts from the past year. This might sound tedious, but if you arrange all your forms prior, it will make it easier to find them later on. Creating a checklist and having a designated folder for all your documents will help you stay organized so you can avoid making errors.

Hire a Tax Professional

Filing for your tax return can be a stressful and lengthy process, especially if you’re doing it alone. Everyone lives are busy, and the spare time you do have you most likely don’t want to spend on your tax return. Hiring a skilled and qualified tax expert can help make the process easier. Our accountants work in your best interests, to save you the highest amount possible. They will work with you every step of the way to ensure all forms are filled out correctly and on time.

File Your Tax Return On Time

This is not the time to procrastinate! Allow yourself to enjoy your summer knowing that you already submitted your tax return. Even though the tax extension is six months, the earlier you start, the better off you will be in the long run. Also, the earlier you submit your return, the faster you’ll receive your refund. Look at it this way: the money you receive from your refund can go towards paying off debt, an emergency fund, or even using a portion of it for leisure this summer.

If you want to avoid feeling stressed and overwhelmed when filing for your tax return, then don’t wait until the last minute to get started. The accounting professionals at Calabrese & Associates, P.C. are willing and able to help you before the tax extension deadline. Contact us today to find out more about the tax services we provide!

Get Your Finances on the Right Track This Year!

This year is the perfect opportunity to take control of your finances! Due to COVID-19, almost everyone’s financial situation looks a little different than in previous years. With business owners closing their doors and over 20 million jobs lost in the U.S., saving for your child’s education or retirement might not have been at the top of everyone’s priorities last year. Life getting “back to normal” is a great opportunity to get your finances on the right track.

5 Easy Steps to Get Your Finances in Order

1.      Create a Budget

Creating a budget and sticking to it is key to getting your finances in order. An easy way to start is by tracking your money and determining if your spending habits align with your financial goals. Also, create a spreadsheet and write down your monthly expenses including, clothing, eating out, and entertainment. Having your expenses written down will help you see where your money goes each month and what you need to cut back on.

2.      Pay Off Debt

Most of us have some form of debt that we need to pay off, whether it’s credit card debt, student loans, or car loans. Reducing your debt is a step forward to getting your finances in order. Make sure you pay at least the minimum balance each month, so you don’t get hit with late penalty fees and ruin your credit score.

3.      Set Up An Emergency Fund

This past year has shown us that it’s important to save for a rainy day. It’s recommended to have saved between two and three months of income in case of an emergency. Whether you need car repairs, to move, or you lose your job, having a cushion in your savings will help you financially.

4.      Organize Financial Documents

Spend time gathering and organizing important documents, including tax forms, bills, and receipts from the past year. Create a folder where you can easily access and store these documents to help you stay organized and on top of your finances.

5.       Make Long-Term Goals

When financial planning, it’s important to have long-term goals to work towards, whether it’s to buy a house or to start preparing for retirement. The earlier you start planning, the longer your money has to grow and the better off you will be when the time comes.

There’s no better time to start getting your finances in order than now! The professionals at Calabrese & Associates, P.C. have the skills and experience needed to help you get your finances on track. For more information on the services we provide, visit our website today!

How You Can Benefit from Hiring an Accountant as a Small Business

Running a small business can be challenging and has many demands, making it difficult for a business owner to develop an effective financial management strategy. Hiring a qualified and experienced accountant may help protect your finances, bring more money into your business and help reduce expenses ensuring that you focus all your time on making sure your business remains profitable. Learn more on how your business can benefit from hiring an accountant!

5 Benefits of Hiring an Accountant

1.      Reduce Tax Liability

Taxes can be difficult and complicated since you need to be aware of tax regulations, expenses, and reporting criteria. It’s a tax professional’s job to save businesses as much money as possible by developing a profit-maximizing tax method. Businesses have to pay four quarterly estimated tax payments a year, which can get quite costly. An accountant will help you file for your business’s tax return, submit forms on time, and find you tax loopholes.

2.      Minimizing Business Expenses

Financial experts will work with your company all year round to ensure it remains profitable and keep as much money as possible in your company’s pocket. Experts will enforce strict financial controls and reduce expenses by checking for errors on balance sheets and cash flow statements.

3.      Bookkeeping

An accountant will look over your day-to-day financial expenses, including preparing bank statements and payable invoices. As a business owner, your attention is needed in all areas of your business but it’s important to stay on top of these financial tasks. If you forget to submit or report a payment, it can lead to inconsistency in your recordkeeping. An accounting professional will go through each of your business transactions diligently to ensure all payments are correct.

4.      Save Time

As a business owner, you work 24/7nd your attention is being pulled into so many directions. Hiring an accountant allows you to focus all your energy on other aspects of your business. When you have some extra time, don’t use it on a time-consuming and tedious task that a skilled professional can do.

5.      Awareness of Your Financial Opportunity

Accountants will look out for your future success so that your company can continue to grow and remain sustainable over time. They have the skills needed to educate businesses of all sizes on their financial opportunities and when you should invest.

No matter the size of your business, take the weight off your shoulders and consider hiring a reliable accountant. The professionals at Calabrese & Associates, P.C will have your business’s best interest in mind and help you every step of the way. Contact our team today with any questions you may have!

How to Start Retirement Planning?

The best time to start is right now! Retirement planning is something we all should be doing, but most of us don’t take the time to start. The earlier you start preparing and saving the faster you will reach your financial goals for retirement. If you’re having trouble getting started, we’ve got the top retirement planning tips for you to follow!

Retirement Planning Tips

1.      When You Should Start Retirement Planning

Believe it or not, your 20s is the best time to start saving for your retirement. Most 20-year-olds are only just getting started in their careers and aren’t thinking about planning for the future. But the earlier you start planning, the more money you will have saved in the long run. Remember, it’s never too late to start preparing!

2.      Determine When to Retire

There’s no set age you need to retire at, it all depends when you want to and are financially stable to do so. But having an idea of when you would want to retire will help you plan how much you need to save to live comfortably!

3.      Prioritize Your Financial Goals

For most people saving for retirement isn’t the only thing they are saving for. Some are paying off student loans, saving for a new car or house, and building up an emergency fund. This is why it’s important to make a list of your expenses and financial goals to determine how much of your paycheck to set aside to help build your retirement savings.

4.      Choose a Retirement Plan

Once you’ve determined how much you need to save for your retirement, you need to decide where to save it. Working with an accountant or financial planner will help you choose the best plan for you. Some of the most common retirement plans include:

  • 401(k)
  • Traditional IRA
  • Roth IRA
  • Solo 401(k)
  • Sep IRA

5.      Consider Retirement Investments

When retirement planning, investing your money is a great way for you to build your savings. Stocks, bonds, and real estate are some of the most profitable investments, especially if you don’t need the money right away and you can let it grow.

Retirement looks different for everyone whether you’re starting a new hobby or relaxing on a beach you need enough savings so you can live the dream retirement you deserve. At Calabrese & Associates, P.C. our accounting professionals will assist with retirement planning and help your business develop an employee retirement plan. Visit our website today to get started!

Ideas for What to Do with Your IRS Refund?

Filing your taxes may not be your idea of fun but receiving a tax refund can be! Since the federal tax filing deadline for individuals has been extended to May 17, 2021, your tax refund may not come for a few more weeks. Once you receive your refund you might be tempted to use it on a shopping spree or dream vacation. While that is one option, check out some other fun and smart ways to use your IRS refund.

6 Things to Do with Your IRS Refund

1.      Save It

There are a few ways you can choose to receive your IRS refund. You can get your refund directly deposited into your bank account or mailed to you as a paper check or debit card. Choosing to get your refund direct deposit is the perfect opportunity to put more money into your savings account and limit your temptation to spend it.

2.      Pay off debt

Paying off debt isn’t fun, but it’s the second most common way people spend their refund. Whether you have credit card debt or college loans you need to pay off, consider putting your IRS refund towards your debt. Even if your refund isn’t enough to pay all your debt, putting as much as you can towards paying even your smallest debts can make a big difference.

3.      Invest in the Stock Market

If you’re looking to invest your savings to reach your long-term goals, purchasing stocks or mutual funds has been reported to deliver better returns in the long run.

4.      Create an Emergency Fund

This past year is a great example that emergencies can happen. A sudden job loss, medical emergency, or car repair can lead you to take out loans or carry credit card debt. Using your IRS refund to start an emergency fund is a great way to add cushion to your savings account.

5.      Start a Business

Have you been wanting to turn your hobby into a small business, but money has been holding you back? Take advantage of your refund this year and use it to build up inventory, design a website, and get everything you need to turn your hobby into a business venture.

6.      Boost Your Retirement Savings

Have you been dreaming of retirement? Speed up the process by adding your refund into a retirement account. Putting your IRS refund into an IRA or 401(k) is a great way to start saving for your future retirement, especially if your job doesn’t offer a retirement plan. Depositing your tax refund into your IRA every year will help you meet your retirement goals quicker.

If you want to stop spending your refund all in one place, contact the tax professionals at Calabrese & Associates, P.C. Our team has the skills and experience needed to assist you or your business. Visit our website today to get started!

All You Need to Know About the 2021 Tax Extension

 

If you haven’t started on your tax return, don’t worry! The IRS has officially announced that they are pushing back the tax return deadline this year to May 17, 2021, due to the ongoing pandemic. If you have questions regarding this year’s tax extension, let us help!

The Answers to All Your Tax Extension Questions

1.      Why Has the Tax Deadline Been Extended?

Due to the COVID-19 pandemic, the IRS has made the decision to extend this year’s federal income tax filing deadline for an extra month. This tax extension is to give taxpayers enough time to file and make payments, without interest or penalties. Since this tax season is guaranteed to look different, there are a few extra steps you need to take that will make the tax return process longer, including:

  • Reporting Unemployment Benefits and PPP Loans
  • If you received or didn’t receive your stimulus check(s)
  • Claiming Charitable Donations

2.      Who Does the Tax Extension Apply to?

This year’s tax extension applies to individual taxpayers and individuals who pay self-employment taxes. This means that if you owe money or need to submit your tax return, you don’t need to until May 17, 2021. Taxpayers don’t need to file any forms to qualify for this tax extension.

3.      What Doesn’t Appy to the Tax Extension?

Unfortunately, businesses and quarterly estimated tax payments do not apply for this year’s tax extension. The first quarterly tax payment for businesses this year is still due on April 15, 2021. Also, the May 17th income tax extension only applies to your federal taxes, not state taxes.

4.      What You Should Do Before the Deadline?

Some steps to take before you file for your return are to make sure all tax documents are in order, decide if you need to hire a tax professional and make a plan for your tax return.

If you’re behind on filing your taxes this year, you have some extra time to make sure you’re prepared for the deadline. It’s not too late to hire an accountant! Allow the tax professionals at Calabrese & Associates, P.C. to help you this tax season. Contact us today with any questions or concerns you may have.

In Need of Tax Return Help?

Filing for your tax return can be a confusing and stressful experience for many taxpayers, especially during the uncertain times we are living in. Many factors make the tax return process challenging, including your tax filing status, age, and income. If you’re looking for tax return help, we’ve got the tips you need!

5 Tax Return Help Tips

1.      Gather Important Documents

Before you can begin filing for your tax return, you will need to gather proof of income, expenses that can be deductible, and important tax forms. Creating a checklist is a great way to stay organized during tax season. The documents you should have on hand include:

  • Social security numbers
  • W-2 Form
  • Charitable donations
  • 1099 Form
  • Retirement account contributions
  • Last year’s state and federal tax returns

2.      Decide How to File for your Tax Return

There are different ways to file for your tax return. You can either hire a tax professional or fill out your forms by hand and mail it out.

3.      Keep an Eye on Deadlines

No matter who you are, life can get busy. However, as a taxpayer, you need to be on top of tax due dates since the IRS has been changing and postponing deadlines. This year’s tax deadline has been moved to May 17, 2021. Business owners are required by the IRS to pay quarterly tax payments, so make sure to know which deadlines apply to you.

4.      Hire an Accountant

Whether you’re having trouble getting started or just need tax return help, an accountant can assist you or your business every step of the way. A tax professional will help you with tax planning and preparation and make sure all tax forms are filled out correctly so they can be submitted on time.

5.      What to do With Your Refund

It can take a few weeks for your tax refund to process, but once you receive it there are a few things you might want to do with it:

  • Pay off debt
  • Send it to savings
  • Putting it in your retirement funds
  • Invest in the stock market

 

If you need tax return help, hiring an accounting professional may be exactly what you or your business needs. Calabrese & Associates, P.C. is a local accounting firm that will make sure all your financial needs are met. For more information, visit our website.

What are the 2021 Tax Deadlines?

The IRS has officially pushed back this year’s tax filing season due to the ongoing coronavirus pandemic. Taxpayers need to be aware of tax due dates and filing deadlines to avoid being hit with late penalty fees. Read on to find out more about the 2021 tax deadlines. 

2021 Tax Deadlines

1.      Individual Tax Return

The official deadline to file for your 2020 individual tax return has been postponed to May 17, 2021. If you requested a tax return extension, and it has been approved your new deadline for your federal income tax return is still October 15, 2021.

2.      Corporation Tax Returns

Depending on the type of corporation you have, your 2021 tax deadlines will be different. C-corporation and S-corporation tax returns run on the calendar year.

  • The IRS Form 1120 for C-corporations are always due on the 15th day of the fourth month of a corporation’s fiscal year. This year it falls on April 15, 2021, and the extended deadline is October 15, 2021.
  • The IRS form 1120-S for S-corporations was due March 15, 2021, but if you filed for an extension you have until September 15, 2021.

3.      Quarterly Tax Return Deadlines

For taxpayers who are independent contractors, self-employed, or received an income from other than payroll, you are required to make quarterly tax payments. This year’s quarterly 2021 tax deadlines include:

  • April 15, 2021
  • June 15, 2021
  • September 15, 2021
  • January 17, 2022

What Happens if you Miss a Deadline?

If you miss a tax deadline, you will most likely be hit with a late penalty fee or an extra interest charge. It’s important to submit all tax documents and any taxes you owe as soon as possible. The penalty for filing your 1040 form late is five percent of the tax due that month and an extra five percent every month after that. If you can’t afford your tax bill, make sure to pay as much as you can.

2021 tax deadlines will be here before we know it. If you need financial assistance this tax season or just have a few questions, the team at Calabrese & Associates, P.C. is here to help! Contact us today to get started.