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Tax FAQ For Tax Year 2020

Tax FAQ for Tax Year 2020

Q: When are my taxes due? A: May 17, 2021 is the due date for individual tax returns – Form 1040 – and making 2020 income tax payments. But there are other due dates you may need to know too: April 15: 1st estimated tax payment for 2021 April 15: income tax return for C corporations Q: Is my stimulus payment taxable? A: NO! Your stimulus payments (officially called Economic Impact Payments, or EIPs) are not taxable. Q: Why did my tax preparer/tax software ask how much I got for stimulus payments? A: Even though the EIPs aren’t taxable, they…

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How To Make Estimated Tax Payments And Avoid IRS Penalties

How to Make Estimated Tax Payments and Avoid IRS Penalties

UPDATED FOR 2021 So many people – especially newly divorced single moms and first-time freelancers – end up in tax trouble for one common reason: They don't realize they need to make estimated tax payments.  So if you: Started a business Have a side gig Got unemployment Work from home as a freelancer Have any 1099-NEC or 1099-MISC income Have investment income Take money out of a retirement account… You could get a nasty surprise at tax time, unless you do something proactive to prevent it...  Make quarterly estimated tax payments during the year. What kind of income would be…

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Self-Employment Taxes: Here’s What You Need to Know

More and more people - especially single moms -  are working multiple jobs or side gigs to make ends meet. But not all of those jobs come with a “normal” paycheck, the kind with taxes taken out. And that's why you need to know about self-employment taxes. When you work as a freelancer or independent contractor, have your own business (no matter how small), or have a side gig where you’re not an official employee, you are self-employed…and that means you’ll probably have to pay self-employment taxes. Self-employment taxes are really just Social Security and Medicare taxes, also called payroll…

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How Freelancers, 1099 Workers, and Self-Employed Can Deduct 20% of Business Income

Did you know that you can deduct 20% of your business income on your personal tax return? You can, thanks to the Tax Cut and Jobs Act (TCJA). The TCJA brought a lot of tax changes for small business owners. And if you're self-employed, a freelancer, contractor, or had any 1099 income - even from a side gig - that includes you. The biggest tax change: A 20% deduction on self-employed business income called the Qualified Business Income Deduction. That means you will only pay income tax on 80% of your qualified business income. The 20% deduction is for income…

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How To Fill Out Schedule C If You’re Self-Employed

If you're self-employed, work as a freelancer or contractor, or have a side gig, you are a business. And that means you'll need to fill out Schedule C as part of your federal income tax return. When you use Schedule C, you can deduct business expenses against the money you earned to lower your income... and lower your tax bill. Your tax software will do all of the math for you – but you still have to enter all the correct information. After all, the tax software has no idea how much you spent on office supplies unless you tell…

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