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Tax Day 2021: Plan to file federal taxes by April 15

Matt Crawford image
By Matt Crawford
Dec 29, 2020 min read

It’s the question that almost everyone hates to ask: When is tax day in 2021?

The deadline to file federal tax forms is April 15, a return to the normal IRS schedule after it made adjustments in 2020 to accommodate widespread disruptions caused by the coronavirus. 

In most years, tax day is on April 15 or within a few days. Because that date was near the first peak of the coronavirus crisis in 2020, the IRS has extended the filing deadline by three months to July 15, 2020. Individual federal income tax filings also benefited from the extension.

Businesses who still cannot file their taxes in time for the deadline in 2021 can apply for an additional extension through a form 7004.

When is tax day? April 15, 2021

The deadline for filing for state taxes

It’s important to consider that the federal tax deadlines do not always fall on the same day as state tax deadlines. Check with your state’s tax agency or consult with a licensed tax professional to learn more about your requirements.

Each state calculates its tax rates a bit differently. Generally, if your business is incorporated, you pay corporate income tax. If you are a sole proprietorship or limited liability company (LLC), you pay personal income tax. 

When to pay taxes

Many self-employed and independent contractors don’t wait until tax day to file their taxes. It is common for contractors to pay quarterly taxes to avoid a high tax bill with annual filings. Since there is no self-employed tax withholding, those in business for themselves often pay nearly 30% of revenue to the IRS. 

Businesses can fill out Form 1040-ES to make quarterly payments. That helps you to make the calculation for what you owe for income tax, social security, and medicare. 

Self-employed and business deductions

There are several deductions self-employed workers and independent contractors can claim. Generally, you can deduct ordinary and necessary expenses to run your business. Here are a few examples of small business tax deductions:

Transportation. If you own or rent a business vehicle, you can claim those costs. You may also claim the expenses related to the business use of your personal vehicle.

Utilities. Your overhead costs, including commercial rent, electricity, and telecommunications may qualify as business expenses.

Insurance. If you buy business insurance, you can claim that cost as a deduction. The insurance tax deduction applies as long as the coverage is for your business or trade. 

Retirement accounts. If you establish savings or retirement plans out of your business for yourself or your employees, you may be able to deduct this as a business expense. 

Because of the diverse nature of the economy, there are several business tax write-offs. Keep track of everything you spend to run your company — there's a good chance those expenses may be deductible — and consult with a tax professional to make sure you remain in compliance. 

Learn more about 9 amazing tax deductions for independent contractors.

Preparing your taxes

Working with a licensed accountant can ensure your taxes are complete and accurate. A tax preparer may also know all of the potential tax deductions that are specific to your business, so you are able to reduce the amount you owe as much as possible. 

Your accountant can also help you to store and track your business receipts, in addition to a detailed record and description that shows the reason for the expense. In the event of an audit, you need to prove your deductions are legitimate. 

Also, good record-keeping helps ensure you don't lose out on a potential write-off that could work in your favor at tax time.

Get prepared for tax day

To keep your small business on track, you have to think about important protections like insurance and business planning. 

No matter when your taxes are due this year, start early so you'll have the maximum opportunity to claim deductions and avoid penalties and interest.

When to pay taxes

Most self-employed and independent contractors won't wait until tax day to file their 2019 taxes. 

Typically, these individuals estimate the tax they will owe and pay it quarterly to avoid a high tax bill with annual filings. Since there is no self-employed tax withholding, those in business for themselves often pay nearly 30% of revenue to the IRS. 

Businesses can fill out Form 1040-ES to make quarterly payments. That helps you to make the calculation for what you owe for income tax, social security, and medicare.

Tax resources for small businesses and self-employed workers

How to File Self Employment Taxes – Step by Step

Tips for filing small business taxes for the first time

Self Employed Tax Withholding Explained

IRS website for business taxes

How Next Insurance helps small business owners

Next Insurance provides an easy online option for small business owners and self-employed professionals to purchase business insurance, which oftentimes can be a tax write-off (consulted with a licensed tax professional to see if you qualify).

We provide customized insurance packages for more than 1,100 types of small business. You can get a quote, purchase coverage and get your certificate in less than 10 minutes.

If you need help at any point, our team of U.S.-based advisors is standing by to answer your questions.

Start a free instant quote today.

Matt Crawford image
By Matt Crawford
Matt Crawford is Associate Content Director at Next Insurance and a small business insurance specialist.
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