How quickly can you file your federal income tax return in 2020?
Earlier is usually better. As soon as you have all the relevant documents on hand, you can file with the IRS. Employers have until the end of the year to send in their W-2s. Most other tax forms will also be issued during this time.
What happens if you miss the deadline to file your taxes?
The deadline for filing your federal and state income tax return is April 15, 2021 for almost all individuals and businesses across the country, although some exceptions exist. It is important to file your taxes on time. If you know that you will not be able to meet the initial deadline, you can always request an extension, but only as a preventive measure. If you are granted an extension, you will have until October 15 to submit your request.
If you miss the deadline and owe the IRS money, you could be charged a penalty for failure to report. You can incur this penalty even if you pay taxes but do not pay all you owe. According to the IRS, the penalty is “typically 5% of the tax owed for each month or part of a month that your federal return is late, up to a maximum of 25%.” Once you’re more than 60 days late, the minimum late filing penalty is $ 210 or 100% of the tax you owe, whichever is less.
If you don’t pay your taxes on time, the IRS will charge you a default penalty equal to half of 1% of the unpaid taxes owed. While that may not seem like much, this penalty is getting worse.
If you don’t file a return but the government owes you a refund, the consequences become much less serious. The IRS does not levy any penalties against taxpayers who file late and owe money to the IRS. Taxpayers have a three-year grace period to claim their tax refund, but if they don’t meet that deadline, the money will go to the US Treasury.
Which tax filing software is the best?
Through our review process, we have determined that Intuit TurboTax is the best online tax filing software on the market. Its extensive functionality and easy-to-use interface, coupled with the ability to get remote assistance from a CPA, make it a solid solution for most individuals and small businesses. With excellent customer service to guide users through the tax filing process, TurboTax sets itself apart from its competition.
What is the easiest tax software to use?
H&R Block’s online software for independent filers is incredibly easy to use. Self-employed people already have a lot going on, so the fact that H&R Block’s software makes it easy to file taxes is a huge boon.
You can import tax returns from other platforms that you have used in previous years to speed up data entry. Self-employed taxpayers who subscribe to the Company’s Self-Employed Worker package can use the software to find each relevant business tax deduction (and other beneficial rules) that reduce their tax burden while increasing their potential tax return.
The software’s interface is easy to navigate, and unlike some of its competitors, H&R Block lists its tax filing costs up front, giving you an idea of the cost of the service. The service also gives its users access to professional help, although this service costs an additional fee.
Why would you use tax preparation software?
There are many reasons business owners use tax preparation software – speed and accuracy are the two main factors. With tax software, entering data is as easy as scanning an existing form so that the relevant information is automatically added to the correct fields. What would take hours to do by hand only takes a few minutes with a computer or mobile device.
As for the accuracy factor, errors or omissions can be detrimental to a taxpayer. Such errors can lead to audits, fines and other injunctions, such as levies on your assets. The tax software checks your return for errors before sending your documents to the IRS. Most tax software also checks for deductions or credits that apply to your tax situation, potentially increasing the amount you receive on a return.
Should I hire a tax specialist?
Whether you hire a professional like a CPA or a tax preparer to handle your small business taxes depends on a wide range of factors. No two tax situations are the same for a business – the decision should ultimately depend on the complexity and filing status of your business.
The process for filing income tax for your business is very different from that for your personal taxes. While most individuals file a simple Form 1040, businesses need complex tax forms that vary depending on the structure of the business. Your personal life also plays a major role in your business filing needs, as important life situations such as your marital status, number of dependents, and any income from a different state all matter.
At the end of the day, if you hire a professional, it takes time and money. If you can afford it and don’t feel you have enough time to run your business and still file on time, you should hire a pro. Likewise, if you are worried about incorrectly filing your corporate taxes, risking your own money and your business through costly mistakes, hire a tax professional.
Ready to decide which tax software is best for your business? Here are some other resources to consider before making your decision: