

The coronavirus pandemic has changed the way small businesses run — and subsequently their business tax obligations.
What should small business owners know right now to prepare for tax season? Here are some guidelines for what entrepreneurs need to consider when preparing business taxes this year.
Individual taxpayers typically only think about meeting the April 15 tax deadline. However, small businesses have several dates that they need to keep in mind for tax purposes.
Some of these deadlines have already passed. By February 1, 2021 Form W-2 and Form 1099-MISC should have already been submitted to the IRS and mailed out to all employees and independent contractors. The S Corporation annual tax return deadline is March 15, 2021. Any extensions must be filed this date.
What about quarterly estimated tax payments? The first installment for sole proprietorships and self-employed individuals that owe $1,000 or more in taxes must be paid between January 1 and March 31, 2021. Below is the quarterly estimated tax payment timeline for 2021:
In addition to individual taxes, income tax and income tax return extensions for C Corporations must be filed by April 15.
New resources were introduced during 2020 for entrepreneurs in need of financial relief amid COVID-19. Here is what some of those programs may mean for your taxes.
Depending on the type of business you have incorporated as, you may be able to receive certain tax breaks and deductions.
Self-employed workers, for example, may be eligible to receive tax deductions for the following items.
Self-employed individuals may also qualify for more tax deductions, including deducting self-employment taxes, retirement savings, and advertising their services.
Businesses that have incorporated as a limited liability company (LLC), for example, may be looking at similar tax deduction opportunities. Some of these include rent for their office space, utilities like electricity and internet that allow for running a business smoothly. They may even be able to deduct employee salaries.
Tax deductions will differ depending on your entity formation. It’s advised that you meet with a tax professional, like a CPA, to determine which deductions are applicable to your business and may receive a write-off.
You have an understanding of upcoming tax deadlines, COVID-19 programs and resources, and tax deductions that you may qualify for depending on your business entity. It is possible you may still have more questions about the tax process — and that’s okay.
If you have additional questions, please meet with a tax professional such as a qualified accountant or CPA. They can help guide you through the tax process, let you know about any other credits or deductions your business may be eligible for, and answer any questions you may have as it pertains to the 2020 tax year and small business taxes in general.
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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.