Oh, 2021. I cannot tell you how happy we are to see you. You will be better than 2020, right? Right?!? via GIPHY
And just so there's no confusion, that's a question New Year 2021, not a challenge. So don't you dare try to outdo the just-past Year of COVID-19 and its many, many complications, including in the tax world.
Jan. 1: While there's some good news with vaccines going out to fight the coronavirus pandemic, we'll still be dealing with it for a while. The Internal Revenue Service is delivering the second round of relief payments and the commissioner promises that the agency will start the 2021 filing season as usual later this month. I hope that's correct, but we shall see.
Jan. 4: If your job made it through the tough last year, good for you and your company and welcome to the New Year's first work week. It's the perfect time to refine your payroll withholding. This is particularly applicable true for federal employees, including members of the military and even IRS personnel, whose withholding was suspended that last few months of 2020. That money must be paid to Uncle Sam, but a new late-year law says the repayment isn't due until the end of 2021. Adjustment withholding now will give you 52 weeks to spread it across, making the per-paycheck bite less painful.
Jan. 7: The IRS' online withholding assistant or your tax pro can help you with your withholding amount and other tax numbers, but it's also a good idea going into a New Year to have an idea of your tax bracket and income tax rate. The rates tend to hold steady (until Congress starts fiddling!), but the brackets are adjusted annually for inflation. You can check out the 2021 income brackets (and 2020's for comparison) in the first post in the ol' blog's annual inflation series. At the end of that item, you'll find a directly to the other nine inflation items.
Jan. 11: Continuing coronavirus precautions mean some restaurants are still closed for in-house dining. Other eateries are managing with take-out meals and deliveries. Whether you're able to enjoy table service in or getting food brought to your house, remember to tip your server or delivery person.
If a tip isn't included in your food delivery charge, click the image above to calculate how much to tip the person who brought it to you.
As for servers who are still on the job, remember that your
tips are taxable income. If you at least $20 in job-related gratuities last December, you need to account for them today by using
Form 4070 to report your tips today to your employer.
Jan. 13: Did some of those tips come from a side hustle? That's just one of the
tax matters to think about when you are part of the
gig economy. In these freelance or contractor situations, you'll need to pay
estimated taxes.
Jan. 15: The final estimated tax payment for the prior year, 2020 in this case, is due today. The other three payments are for earnings in 2021 that aren't subject to withholding and are due on April 15, June 15 and Sept. 15. And be sure to account for your
self-employment tax in figuring your estimated amounts.
Jan. 18: Many people spend Martin Luther King Jr. Day each year as a
day of service.
Click image to find out ways
you can volunteer on MLK Day. Taking time on Dr. King's holiday to volunteer at a charity isn't tax deductible, but some costs associated with
volunteering could help reduce your tax bill if you itemize. Most filers, however, claim the standard deduction and a new tax law gives them a tax break, too. On your 2020 return, you can claim up to
$300 in donations directly on your Form 1040. In 2021, the $300 amount remains, but is doubled for couples who file jointly.
Jan. 21: If the IRS meets its usual timetable, the annual tax-filing season will start soon. If you can get your tax material together, then there are several
good reasons to file your return early.
Jan. 25: Millions of filers find electronic tax options are great ways to get returns to the IRS as soon as possible. The tax agency agrees. In fact, for almost two decades, the IRS has partnered with the Free File Alliance to offer eligible taxpayers access to online tax software and e-filing through the aptly named
Free File site at IRS.gov.
Last year, Free File was available to filers with adjusted gross income of
$69,000 or less, regardless of filing status. That threshold has been bumped up to $72,000 for this filing season. If you're eligible, be ready to log-on when Free File officially opens, which usually around this time.
Jan. 29: Of course, regardless of how you file your taxes, you can't do so until you all the necessary documents, such as
W-2 and
1099 forms. Employers have until the end of the month (or Feb. 1 this year since Jan. 31 falls on Sunday) to get the to you, so be on the lookout for all the
documents you need to file.
Small Business Tax Calendar: Important
filing, deposit and record keeping dates throughout the year that your company needs to know. You can get more tax calendar information at the IRS'
online calendar page and view the full year's important business and individual tax dates in
IRS Pub. 509.
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