Tax season is here and sadly, taxes are an annual occurrence for most of us. With all of the changes to our current economy, it is easy to forget some minor details. There are some slight changes to tax policy since this year was the start of a new administration along with the end of the pandemic. With all of the extreme weather included into that, you have the formula for a hectic tax season.
One thing you don’t want to be short of is your expenses. Try to think of all the expenses and credits you have accumulated over the year with the Pandemic. You might have lost income due to the pandemic, but hopefully not your employment or business. If you own a business, remember to prove how Covid-19 caused you to lose income. The right tax expert will be ready to help you look for areas you might have lost out. Social or public avenues will benefit from pulling together all the losses caused by the virus. Talk to your accountant and hand over all receipts. They will probably be able to pick up on benefits or credits you overlooked.
Natural Disaster Areas
If you experienced difficulty due to the ice and snow storms that occurred around January, February, or March, and you could prove a hardship, that may lighten the load on your tax return. Areas like Texas that were affected by the freeze could be eligible for even more reductions if they encountered physical damage to their business or property. If you lost your home or if you were in an area with a power outage, an extension with other ramifications may be available. Texans have until June 15th to file taxes due to unexpected circumstances.
If you lost farm or heavy equipment, get with your tax accountant and figure out if you can file Form 2290 on the IRS website. You may not be able to get credit for every material loss, but machinery can count as a business loss if it relates to livelihood. Follow up with your accountant for more details. Form 2290 can help you receive a reduction, or it can add to the burden. The amount gained or owed depends on how often the equipment is used in making revenue.
Social Security Numbers
Many people forget that they need the Social Security number of all of their dependents. Social Security numbers can be found among your child’s doctor records, school records or on an apartment lease. If you are worried that you lost your card, you can apply in person at the nearest office. Otherwise, ask for an extension if you cannot reach a social security office. Check old passport folders and birth certificate envelopes if you are planning a trip away from home. If you had childcare this past year you will need to get the social security number of any nanny whom you employed directly. If you list them as an expense, you will need documentation from a facility or the social security number. This way you can ensure that you get your credit. Make sure that you have discussed this with them ahead of time so they can decide if they need to file a 1099 or another form.
Remember to Breathe
Tax Season can be stressful even at the best of times, but remember to breathe. The Federal Tax deadline has been extended for individuals to May 17th. NCDOR has extended the tax deadline for individuals until May 17th also. This year has been stressful for everyone. Business owners do have more responsibility, but will probably owe less this year. Just make sure you get every slip of paper together and take it with you on your next with appointment at your accountants.
If this tax season you owe penalties from last year, experienced great business loss, and live in Cary / Raleigh areas, don’t panic! Call Joe Franek! This is one investment that will allow you to sleep better at night.