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Updated: February 24, 2021
Congratulations! If you are reading this, you survived the infamous year 2020 and have leveled up to 2021. 2020 will bring a whole new meaning to the infamous phrase, “Hindsight is 2020.” We sincerely hope that this New Year proves to be a wonderful and safe year for everyone.
We experienced a continual whirlwind of income tax-related legislation in 2020 right up to the end. While it would be impossible to outline all the changes here, we wanted to give you a few highlights of the changes having a broad impact on many of us. If you have specific questions about any change you have read or heard about, please let us know and we will try to get you the answers you need. Here are some income tax highlights:
Other areas that have caught the focused attention of the IRS include a virtual currency (Bitcoin, cryptocurrency, etc.) and the “gig” economy (think Uber, Lyft, Airbnb, and other similar service providers). The IRS continues to focus on new rules and actions that will help them to properly identify income from these activities. This year’s personal tax return Form 1040 asks the taxpayer to actively answer whether they “received, sold, sent, exchanged or otherwise acquired any financial interest in any virtual currency”. When you sign your personal tax return and/ or electronic filing authorization form, you are attesting to the accuracy of this answer.
Interesting facts: The IRS received 100 million phone calls last year. They answered 24 million. No count on how many of those got mysteriously disconnected after answering. At last count, they have approximately 7 million paper-filed returns, received in 2020, that they have not begun to process. We are hoping that the 10s of millions of pieces of incoming mail that sat in trailers at the IRS for months on end during lockdown are beginning to dwindle.
It is not expected that any surprise extensions for tax returns during the 2021 filing season will occur, and, as such, we have listed below the usual Tax Calendar showing filing deadlines for your reference. It is ALWAYS recommended that you do not wait until the last minute to provide your tax professionals with your tax data or you will be extended and/or must pay late payment interest if you owe tax. Gather your tax data and submit it to your tax professional a month in advance of the deadline at the latest. If you need a recommendation for a tax professional this year, contact us, and we will make an introduction to one of our preferred professionals.
If you want a deeper dive into some of the areas above, here are some links to additional tax-related articles on our website. We will continue updating these articles for any changes considered or signed into law by the Biden Administration.
Website Articles of Interest:
Important Tax Filing Deadlines to Remember:
Note that the IRS announced on February 22nd, 2021 that filing deadline relief was provided for taxpayers in the state of Texas affected by the Severe Winter Storm to June 15th, 2021.
|Return Type||Form||Due Date||Extended Due Date|
|“C” Corporation||1120||Thursday, April 15th, 2021||Wednesday, September 15th, 2021|
|“S” Corporation||1120S||Monday, March 15th, 2021||Wednesday, September 15th, 2021|
|Charitable Trusts||5227||Thursday, April 15th, 2021||Friday, October 15th, 2021|
|Trust or Estate Income Tax||1041||Thursday, April 15th, 2021||Thursday, September 30th,2021|
|Partnership||1065||Monday, March 15th, 2021||Wednesday, September 15th, 2021|
|Individual Income Tax||1040||Thursday, April 15th, 2021||Friday, October 15th, 2021|
|Gift Tax Return||709||Thursday, April 15th, 2021||Friday, October 15th, 2021|
|Foreign Bank Account||FBAR – FinCen 114||Thursday, April 15th, 2021||Friday, October 15th, 2021|
|Exempt Organizations||990||Monday, May 17th, 2021||Monday, November 15th, 2021|
|Estimates For||1120 Q1||Thursday, April 15th, 2021|
|Estimates For||1040 Q1||Thursday, April 15th, 2021|
|Estimates For||1041 Q1||Thursday, April 15th, 2021|
2020 Tax Brackets:
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by STA Wealth Management, LLC), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from STA Wealth Management, LLC. Please remember to contact STA Wealth Management, LLC, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. STA Wealth Management, LLC is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available upon request.