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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.

 

Why You Need an Accountant Now More than Ever

Have you started filling out your tax return yet? If the answer is no or if you’re having trouble getting started, you may need an accounting professional. With the tax return deadline approaching in only a few weeks, you must have all your tax forms and documents in order before the deadline. Find out why you need an accountant.

Why you Need an Accountant for the Upcoming Tax Season

This tax season is guaranteed to look different than last year’s due to people claiming missing stimulus checks, having to file your stimulus check, and many people filing for unemployment – this is why you need an accountant. Accountants are equipped to assist clients with all of these new tax forms and documentation.

Benefits of an Accountant

1.       Helps File Individual Income Tax Return

If you need assistance with your tax preparation and planning, you need an accountant! Accountants will know exactly which forms you need to be filling out and they’ll make sure they are filled correctly and on time to avoid late penalties.

2.       Assists Business Owners

Filing your business tax return for the first time as a business owner can be confusing and complicated. Business owners need to file for taxes quarterly and have more documents to fill out compared to individuals. Accounting professionals will make sure business owners file each quarter and prevent you from making costly mistakes.

3.       Efficient and Timely

An accountant will be on top of tax due dates and ensure all forms are submitted on time so you don’t have to worry about missing deadlines. They will be thorough when going through each document to see if you are missing any important information.

4.       Saves Money

When it comes to tax returns, we all hope that, in the end, we receive some money back and save on costs. An accounting professional will know to write off any deduction you qualify for and do what they can to help you save as much as possible.

In need of an experienced and skilled accounting team to guide you through tax season this year? The accounting professionals at Calabrese & Associates, P.C., are exactly what you need. Visit our website today to schedule your consultation!

Why Your Company Needs an Outside Business Consultant

Business owners are constantly having to deal with making tough decisions. However, with the help of a business consultant, they can guide you and your company through any financial or business decision you may need. Read on to find out more about the benefits of hiring a business consultant.

What is a Business Consultant?

Business consultants can assist companies of any size to improve their performance and efficiency by providing management services. These consultants have the experience and expertise to help a business make difficult decisions and help identify and solve problems, while they continue to grow. Consultants can provide businesses with a wide range of services and take care of the hard decisions.

Benefits of a Business Consultant

1.     Having an Outsider’s Perspective

For small and mid-size companies a lot of times an owner’s attention and resources are focused on other priorities.  A business consultant will have a new perspective on the company and can easily identify problems within an organization that might be blind to the company’s employees.

2.     Help with the Hard Work

Business consultants are sometimes hired to do the “dirty work” in a company and make tough decisions, including firing staff and making salary cuts. Decisions like these can be difficult for business owners to make on their own. Hiring an outside consultant that is trained to handle these difficult tasks within an organization will make the process easier.

3.     Help Create a New Business

Consultants don’t just work with well-established businesses but also with start-up companies. These experts have the skills needed to assist owners with hiring and teaching employees, finding clients, and helping with finances.

4.     Accomplish Short-Term Goals

Short-term goals are just as important as long-term goals, but sometimes business owners are only thinking about the long-term success of their company that they forget to focus on short-term goals. It can be difficult for employers to enforce these goals; experienced consultants can help determine what a company’s short-term goals should be and work with employees to implement them.

If you’re considering outsourcing a business consultant the business experts at Calabrese & Associates, P.C, is exactly what you need. For more information or to schedule a consultation, visit our website today!

 

5 Tax Tips You Need to Know for This Tax Season

Insurance agent presentation and consultations with a lawyer or insurance agent. Law and insurance.

Tax season will be here before we know it and this is the perfect time to get a head start and begin preparing. It’s important to pay your taxes on time to save money and avoid paying tax penalties. Here are a few tax tips you should follow to plan for the upcoming tax season to make the process easier.

5 Helpful Tax Tips

1.     Organize Important Tax Forms

Gathering all your important tax documents should be the first step you take. Deciphering which documents you’ll need in order to file your taxes can get confusing, that’s why printing a tax checklist beforehand can help take some of the guessing away. A few of the forms and documents that would be included on this checklist include:

  • W-2 Form
  • 1099 Form
  • Receipts from the past year
  • Mortgage interest statements
  • Documents of what you paid for any stocks you have sold

2.     Review All Forms

Make sure to double-check all your forms. It’s common to make errors and miss sections when filling out these documents. Having incorrect information on your tax forms can cause delays and lead to penalties. If you need more help, the IRS website has more information on where you can get these forms.

3.     File and Pay on Time

It’s important that you stay on top of tax due dates to make sure you don’t miss filing and late-filing penalties. Taxes need to be filed by April 15, 2021 to avoid consequences, but if you have an extension the filing deadline is October 15, 2021.

4.     Itemize your Tax Deductions

Everybody wants to save money when it comes to taxes. One way to achieve this is by itemizing your standard tax deductions, especially if you are self-employed, live in a high-tax area, or own a home. This tax tip is worth following if your qualified expenses the 2020 standard deduction.

5.     Decide if you Need Help

Finally, the most important tax tip is deciding if you’re overwhelmed or not sure where to start. If so, consider hiring an accountant to assist you throughout the process. A tax professional will make sure all your forms are completed correctly and submitted before the deadline.

Looking for qualified and experienced accountants that can guide you through this tax season? The accounting professionals at Calabrese & Associates, P.C., are exactly what you need. Visit our website today to get started.

 

Everything You Need to Know and More About Tax Season 2021

2021 Tax Season

With the ups and downs of the past year, believe it or not we are rapidly approaching a new Tax Day, Thursday, April 15, 2021. That means that we are currently in the midst of tax season 2021. So, if you’re wondering about some of the changes from the past year, our accounting experts have all the information that you’ll need to know and more.

Important Information about Tax Season 2021

The Start of Filing Season

One of the first things that everyone should know about tax season 2021 is that it’s start will be later than usual. In fact, that the IRS will start accepting and processing tax returns on Friday, February 12, a bit later than previous years that started in January.

Tax documents, money and calculator on a table

Recovery Rebate Credits and Economic Impact Payments

If you’re one of the taxpayers that received an Economic Impact Payment, make sure that you hold on to your Notice 1444 with your records for the year.

You may be able to claim the Recovery Rebate Credit on your federal income tax return if:

  • You didn’t receive an Economic Impact Payment
  • The payment was less than $1,200 ($2,400 if married and filing jointly in 2018 or 2019), in addition to $500 for every child had in 2020

Taxpayers who didn’t receive the full amount of the Economic Impact Payment they were eligible for can claim the Recovery Rebate Credit when they file in 2021.

Calendar with the 15th highlighted

Changes to Charitable Donations

Another new wrinkle in tax season 2021, taxpayers that aren’t itemizing deductions are eligible to take a charitable donation up to $300 for 2020 cash contributions to qualifying organizations. Click here for more information about the eligible organizations.

For any other questions or concerns about tax season 2021, leave it up to the pros at Calabrese & Associates, P.C. to take care of your filing. Our team of expert accountants have the experience and knowledge to get the most out of your returns.

How to Choose the Right Tax Preparer for You and Your Needs

Tax Preparer

With the end of a tumultuous 2020 approaching, tax season is right around the corner. And with the topsy-turvy nature of that last year, it’s never been more important to get the right tax preparer services for you and your individual needs. Therefore, take it from the pros. Here are a few tips and tricks to use in order to find the right accountant for your situation and finances.

Tips for Find the Right Tax Preparer

Check the Credentials

One of the best ways to determine you’re enlisting the efforts of a qualified tax preparer is by checking their credentials and affiliations. Ideally, you want to search for certified public accountants (CPA) like Calabrese & Associates, P.C.

Likewise, it helps if, like us, they are members of the American Institute of Certified Public Accountants, the New York State Society of Certified Public Accountants, and/or the National Association of Tax Professionals. Ultimately, experience and association memberships are key as these organizations usually have a code of ethics and many certification requirements.

2021 Taxes calculator on papers

Ensure you’re Getting the Right Attention

In terms of choosing the right tax preparer for you and your needs, it’s important to consider the level of attention and care you’ll be receiving. When you enlist the services of a big, corporate firm, you might feel like just another number or account for them.

However, with an accounting team like Calabrese & Associates, P.C., you can rest easy knowing that you’ll be receiving highly personalized attention for your taxes and preparation. There will always be a real person to call or contact that will know all about your situation and be prepared to give you the right financial solutions.

Magnifying glass over a calculator

Do your Homework

Generally, you want to ensure that your tax preparer can take care of your needs in the account of an exam or audit. Whoever you research to become your accountant, you need to be able to ask these questions. And in the event they’re answered to your liking, you can begin a fruitful, professional relationship.

When you’re looking for a tax preparer, consider the hard-working, dedicated team of Calabrese & Associates, P.C. We have the knowledge and experience to take you forward into financial success. Check out our website to learn more and schedule a consultation today!

How Tax Rates May Change during the Upcoming Biden Presidency

Accountant filing taxes

No matter who is president, chances are that they will have different ideas on taxes that will change the amounts individuals and companies will have to pay. And, under new President-elect Joe Biden’s impending presidency, that doesn’t seem likely to change. Therefore, keep up with the latest changes to tax rates by checking out our quick, simple explainer blog on the topic.

Potential Tax Rates and Changes Expected under Biden

Corporate Tax Rates

One of President-elect Biden’s most touted tax rate changes includes an increase to the corporate tax rate to 28 percent. Biden reportedly intends to repeal President Donald Trump’s tax plan, which initially lowered the corporate tax rate from 35 percent to 21 percent.

However, according to the recent Q4 CNBC Global CFO Council Survey, the vast majority of corporate CFOs do not anticipate Biden’s business tax hike will go through as planned. In fact, they generally believe he will be more neutral to businesses and corporations, with more of a focus on pandemic spending and economic growth instead of changes to corporate tax rates.

Rates and money with a financial graph

Social Security

One of President-elect Biden’s most contentious proposed tax rates is an increase on payroll taxes for those earning over $400,000 a year. The plan ultimately aims to boost revenue to Social Security by imposing a 12.4 percent payroll tax on those higher earners.

Social Security card with balance sheet and cash

Deductions

Another one of President-elect Biden’s proposed changes to tax rates encompasses Qualified Business Income. If he goes through with his plan, his administration would phase out and eventually remove the 20 percent Qualified Business Income (QBI) Deduction on taxpayers making more than $400,000 per year.

Although there’s been a lot of chatter about these policies, there’s no telling what could actually happen during Biden’s administration in our current economic climate. Keep an eye on the news and our Calabrese & Associates, P.C. blog in the coming months for more information as it becomes available.