Tax Day is just around the corner, and many people are scrambling to meet the deadline for filing their taxes. Whether you are a first-time filer or a seasoned taxpayer, there are always questions that come up when it comes to taxes. To help ease your worries and provide some helpful insights, we reached out to David Perez, CEO of Tax Maverick, enrolled agent and best-selling author, to answer some of the most trending tax-related questions.
Q: What is the deadline for filing taxes this year?
A: The deadline for filing taxes this year is April 15th, 2021. Due to the ongoing pandemic, the IRS has extended the deadline by a month from the usual April 15th deadline. This applies to individual taxpayers as well as businesses.
Q: Are there any changes to the tax laws this year?
A: Yes, there are some changes to the tax laws this year, mainly due to the pandemic relief efforts. For instance, the stimulus checks that many people received are not taxable income. Additionally, there is a new tax credit available to those who have been impacted by the pandemic, such as job loss or reduced income.
Q: Can I file for an extension if I am unable to file my taxes by the deadline?
A: Yes, you can file for an extension if you are unable to file your taxes by the deadline. The extension gives you an additional six months, but it is important to note that this only extends the time for filing your taxes, not paying them. You will still need to estimate your tax liability and pay any taxes owed by the original deadline to avoid penalties and interest.
Q: I received a notice from the IRS, what should I do?
A: If you received a notice from the IRS, it is important not to panic. Many notices are sent out automatically and can be easily resolved. First, read the notice carefully and make sure you understand what the issue is. If you are unsure, it is best to consult with a tax professional. You can also call the number on the notice to speak with an IRS representative.
Q: I am self-employed, what expenses can I deduct from my taxes?
A: As a self-employed individual, you can deduct expenses that are necessary for your business. This includes things like office supplies, advertising, and business-related travel expenses. It is important to keep detailed records and only deduct expenses that are directly related to your business. If you have any doubts, it is best to consult with a tax professional.
Q: Can I still claim the home office deduction if I have been working from home due to the pandemic?
A: Yes, you can still claim the home office deduction if you have been working from home due to the pandemic. However, there are certain requirements that need to be met, such as using the space exclusively for business purposes and having no other place to conduct business. It is best to consult with a tax professional to ensure you are eligible for this deduction.
Q: What are the consequences of not filing my taxes?
A: If you do not file your taxes, you may face penalties and interest charges from the IRS. These penalties can add up quickly and can make your tax bill much higher than it would have been if you had filed on time. It is always best to file your taxes, even if you cannot pay the full amount owed. You can work out a payment plan with the IRS to pay off your taxes over time.
Q: What should I do if I cannot afford to pay my taxes?
A: If you cannot afford to pay your taxes, you should still file on time and pay as much as you can. Then, you can work out a payment plan with the IRS to pay off the remaining balance. You may also qualify for certain tax relief programs, such as an Offer in Compromise, which allows you to settle your tax debt for less than the full amount owed. It is best to consult with a tax professional to explore your options.
Q: Are there any tax breaks available for small business owners?
A: Yes, there are several tax breaks available for small business owners. One of the most popular is the Section 199A deduction, which allows certain small businesses to deduct up to 20% of their qualified business income. There are also tax credits available for hiring employees, providing healthcare coverage, and investing in renewable energy. It is best to consult with a tax professional to determine which tax breaks apply to your