With 2020 coming to a close, we at Found know that running your own business doesn’t leave you a lot of time and energy for a long, stressful tax filing experience. Whether you’re a procrastinator who tends to leave taxes to the last day (we’ve been there), or an early bird who wants to know exactly what’s in store this tax season, marking the following dates on your calendar will hopefully help make your tax filing experience as unsurprising as possible.
January 15 - 4th 2020 quarterly tax deadline: If you’re self-employed and expect your business to earn a profit in 2020, then it’s likely you’ll need to pay quarterly taxes. January 15th, 2021 is the fourth and final quarterly tax deadline for the 2020 year. If you owe quarterly taxes, you’ll be expected to pay the remainder of your expected quarterly tax liability for 2020. For more information on how to calculate and pay your quarterly taxes, you can find instructions in our quarterly tax guide.
Found users: We’ve got you covered! You’ll get a notification from us a few days before the January 15th deadline asking you if you’d like us to make your tax payment for you. If you say yes, we’ll withdraw the funds from your Taxes account (or from your current Balance, if your Taxes account is underfunded), and make your payment on your behalf.
Late January - IRS begins accepting tax returns: The IRS typically starts processing submitted tax returns in the last week of January. For reference, in 2020, returns from 2019 were processed starting on January 27th. If you’re expecting a refund, you still won’t get your refund until approximately three weeks after your return is processed—so if you’re filing early so that you can get your refund, you’d still receive it in mid-February at the earliest.
January 31 - 1099-MISCs and 1099-Ks must be issued: If you plan to receive a 1099-MISC or 1099-K from a client or employer, then you can expect to receive those documents towards the end of January at the latest. Payers are required to furnish copies of all 1099 documents by January 31st, 2021. Note that these forms must be postmarked by January 31st, so if you haven’t received yours by the 31st, it may still be on the way to you.
If you’re expecting to receive a 1099-MISC or 1099-K, we recommend waiting to file your tax return until you’ve received those documents, even if you’ve been keeping track of your income throughout the year. Remember, the IRS receives a copy of any 1099s that are issued to you, so you want to make extra sure that the income reported on your 1099(s) matches up with the income in your tax return. If there are any discrepancies, you’ll want to sort those out with the payer before you submit.
Note: You’ll only receive a 1099-MISC if you’ve received at least $600 from one client or payee, and you’ll only receive a 1099-K if you’ve received at least $20,000! This applies to gig companies as well; for example, since Uber issues 1099-Ks instead of 1099-MISCs, you shouldn’t expect a 1099-K from Uber unless you know you’ve received at least $20,000 in customer payments.
April 15 - Tax return filing deadline, 1st quarterly tax deadline, and filing extension deadline: April 15th, 2021 will be a big day for all taxpayers, especially self-employed ones. Here are the key deadlines that all fall on April 15th:
Tax return filing deadline: Most people know April 15th as the deadline to file a tax return for the prior year. In reality, this day is also the deadline to pay your remaining tax balance from the year. Any taxpayers who have taxes withheld from all of their income sources (for example, full-time or part-time W-2 employees) typically won’t have to worry about paying a remaining balance, since taxes are being withheld from their paychecks already. However, people who don’t have taxes withheld from their income—like self-employed people—may have a remaining balance to take care of at the end of the year, especially if their quarterly tax payments were made late or incorrectly.
Filing extension deadline: Any taxpayer is eligible to request an extension on their tax filing deadline using Form 4868, which automatically extends your filing deadline to October 15th. The form itself is very short, and takes no time to fill out, so making the filing extension deadline is fairly easy to do—as long as you remember to mark the date on your calendar! Remember: If you don’t request an extension by the April 15th deadline, then you’ll face late filing penalties starting on April 16th.
Note: This is an extension for filing your tax return, not paying your taxes! If you still owe 2020 taxes by April 15th, you’ll still need to pay your remaining balance by that date, even if you file your tax return six months later.
1st quarterly tax deadline: If you owe quarterly taxes (which many self-employed people do), then your first payment deadline for the 2021 year will be on April 15th. Failure to meet that deadline could result in penalties, so you’ll want to make sure you’ve estimated your yearly tax and paid at least one quarter of that total amount by April 15th! If you use Found, we’ll remind you about this deadline a few days beforehand, and make your tax payment on your behalf if you’d like.
June 15 - 2nd quarterly tax deadline: If you owe quarterly taxes, your second payment will be due in June. Note that if you estimated a certain amount of owed tax for the year back in April, it’s a good idea to run the numbers again at each quarterly tax deadline to make sure that you’re paying the correct amount. Paying too much at each deadline could result in you getting a large refund of money that your business could have used throughout the year; paying too little could cause you to incur penalties, and will result in a large tax bill when you file your taxes the following year.
September 15 - 3rd quarterly tax deadline: Your third of four payments would be due at this point. Remember to check in on your income estimates for 2021 to see if your payment amounts need any adjusting!
October 15 - Extended filing deadline: If you’ve requested an extension on filing your tax return, you’ll need to file your 2020 tax return by October 15th, 2021. If you miss that deadline, your late filing penalties would start accruing on October 16th.
Pro-tip: The more organized you are with your tax records, the easier it will be for a deadline to just be another day. Keeping track of all of your business income and expenses, checking in on your income estimates when you pay quarterly taxes (and adjusting as needed), and planning for important tax deadlines will help reduce tax-related stress as much as possible. If you’re not already using Found, you can get started for free here and receive help with all of these tasks.