It’s that time of year again, tax time!
The IRS kicked off tax season on Jan. 24, earlier than previous years. It did so to get a jump on this year's taxes because of backlogs wrought by the pandemic.
The IRS says refunds could be delayed this year for certain filers and has urged taxpayers to file their returns electronically, if possible.
As with the past two tax years, the filing deadline was extended this year, though not because of the pandemic. Tax day is April 18, because the Emancipation Day holiday in Washington, D.C., falls on Tax Day, April 15.
While many taxpayers start thinking about their taxes a few months, weeks or even days before the annual deadline, most people should be thinking about taxes much earlier, says John A. Patoka, a CPA and partner at the Glastonbury accounting firm SRC, Certified Public Accountants, P.C.
“Tax planning is something that everyone, especially small business owners and self-employed individuals, should be thinking about well before the end of the year. They should be talking to a tax professional throughout the year, in order to plan and think about some tax mitigation strategies. After December 31, some options are not available, so it is important to be proactive. Some examples would be investing in equipment for your business, or analyzing capital gains and losses in investment accounts.”
There are several tax law modifications that filers should be aware of this year, he said.
“There’s been a lot of changes because of Covid. Most importantly there are several tax credits that are available, including a credit for self-employed individuals who were impacted by Covid. The Employee Retention Credit can potentially provide up to $7,000 per employee per quarter for qualifying businesses.”
SRC Certified Public Accountants
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860-659-0357
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