Tag Archives: tax season 2021

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.