As American businesses enter another new year with renewed hopes and a stronger desire for recovery and success, there’s one concern that remains in the minds of entrepreneurs and managers alike: Taxes.
Compared to many other parts of a business that are all well worth worrying over, the finances of any company are the most important because of how fundamental they are to the growth and recovery of any firm. From accounts reconciliation and forecasting to liquidity ratios and investor payouts, the number of factors that one must account for when taking care of their finances is nearly endless.
Above all else, taxes remain a fundamental concern that businesses need to worry about because of how technical they may be. This begs the question: “When’s the earliest that I can file for taxes?”
Why does it pay to be an early bird?
If you’ve been running your business for a while now, you’re probably no stranger to the constant hurdle of tax season.
Whether you want to call it the “most tedious process in the world” or the “bane of my business’s existence,” putting facts and figures together for annual reports is no small feat. Regardless if you’re rising to the top, staying at your peak, or entering a slow yet stable decline, it’s safe to say that filing and meeting deadlines will never be an easy process.
Tax filing is a tedious and time-consuming process that involves much number-crunching and constant reviewing to minimize the risk of errors. This is why many find themselves looking for the earliest window of opportunity to put their tax reports together and file them so that the IRS is appeased. In fact, filing early poses a wide range of benefits that are too good to overlook, such as:
- Incentives for early filing
- Time saved
- Less cramming before a deadline—allowing you to work on other crucial parts of your business
- Earlier refund issuance
How soon can you file your 2020 taxes?
Currently, there isn’t much knowledge as to what day the tax season will open for filings in the 2020 year, meaning that the regular deadline of April 15 (or on the next business day, if it falls on a weekend) remains. If you’ve had a change of heart to the way you manage your finances and no longer want to wait until the last minute, then you’re probably thinking about the earliest time to file.
Based on last year’s data, the earliest time that American businesses were allowed to file their taxes was on January 27, 2020—the very first day that firms were allowed to submit their records for the 2019 tax year. While dates may differ depending on the IRS’s incoming announcement, it is safe to assume that this year’s tax opener season will roughly follow the same date.
What do you need to watch out for as soon as you file your taxes early?
Regardless if you’re looking to file on the very first day or week, there are various documents that you’ll need to receive first. Before you get in touch with A4E’s experts to help get all your records in order, these are various tax documents that you’ll need to receive first to complete your returns:
- A W-2 from your employer detailing your earnings (if you’re a solopreneur or small business owner that is still employed)
- 1099 forms if you earn income outside a traditional employment relationship (such as from working in the gig economy)
- A 1098-E form (if you want to deduct student loan interest)
- A 1098-T form (if you plan to claim a Lifetime Learning Credit or the American Opportunity Tax Credit)
- A 1098 form detailing your mortgage interest paid if you plan to deduct it
- A 1095(A) form if you have health insurance purchased through a marketplace under the Affordable Care Act
With a new year settling in and you have more chances to recover and succeed, it’s best to acknowledge that this is the perfect time for you to file your taxes early. Through this guide’s help, you can stay on the lookout for the earliest window that you can send your documents and returns in so that you have a smoother time ahead when running your business!
A4E offers accounting and tax services in Boston, MA for solopreneurs and small business owners so that they can focus on growing their business. If you need an expert that can handle your books or taxes, and manage your finances for success, get in touch with us today to see how we can help!