File Business Taxes Now
Despite Delay of Tax Filing Deadline, Small Businesses Should File As Soon As Possible
Updates and Tips for Small Businesses this Tax Season, Including PPP Loan Forgiveness, Taxation and Expense Deductions
This year will be one of the most unusual – and costly – tax seasons in decades. Experts are saying the wise move for small business owners is to get started ahead of the new filing deadlines.
While the Federal Government has delayed tax filings by one month to May 17th, Keith Hall, the president and CEO of the National Association for the Self-Employed (NASE), the nation's leading advocate and resource for the self-employed and micro-businesses, today encouraged small businesses to still file by April 15, if possible, to ensure for timely refunds many may be expecting.
“Small businesses have extra time to file their tax returns this year, but we still encourage them to file by April 15, if possible, which will help with the timely return of refunds many may be counting on this year. But, if you need it, there is extra time to file your tax returns: May 17.
“Also, for small businesses who received Payroll Protection Program loans under $150,000, those funds are eligible for forgiveness and will not be counted as taxable income on upcoming year-end returns. Furthermore, any business expenses paid with your PPP loan are also deductible. For those small businesses who received loans more than $150,000 or individuals who received a stimulus check-in 2020, it is important to review the tax obligations around any repayment or impact that will have on tax returns.”
Tax Filing Key Updates & Reminders
o The tax return filing date is Monday, May 17 2021*.
o Under the Payroll Protection Program:
o Loans of $150,000 and under are eligible for forgiveness.
o Forgiveness of those loans will not be considered taxable income.
o Expenses paid with your PPP loan are deductible.
o As part of the tax system:
o A lower individual rate, which is where most self-employed small businesses file.
o A doubling of the standard deduction, which is $12,400 for single filers and $24,800 for married couples for 2020 tax returns.
o Reduction or elimination of specific deductions such as for moving expenses or the unlimited state and local tax deductions known as SALT deductions, which are now capped at $10,000.
o A streamlined, standard home office deduction is available.
o The standard mileage rate for business use of an automobile is 56 cents per mile for 2021 tax returns, down from 57.5 cents for 2020 tax returns.
o Limits for retirement plan contributions such as SEPs, IRAs and 401(k) plans may have changed for your situation.
*this applies to the Federal Tax Deadline; click here for a state-by-state guide on their deadlines.
“Don’t forget about hidden or overlooked deductions – apply everything that can make a difference from mileage reimbursement, retirement contributions and the home office deduction. Remember, you are not alone and there are resources out there for help, including NASE.org, IRS.gov and SBA.gov, where information and assistance are readily available,” concluded Hall.
NASE also recently conducted a survey of its members to find out their experience and beliefs regarding the Paycheck Protection Program. The poll was conducted December 2020 through January 2021, with results from 786 small business owner members of NASE, a business demographic made up of primarily small businesses with less than 10 employees, representing the self-employed and gig-economy workers.
