Tax Day is Right Round the Corner
April 15th is right around the corner and that means your taxes are coming due. If you’ve been putting it off, firstly, you shouldn’t have, and secondly, it’s time to get on it. Hopefully you’ve been carefully organizing your receipts like we suggested, along with the rest of your tax records. If not, tax day is going to sneak up on you. Here are a few last minute tax items to check up on that you might have forgotten about.
1. Cryptocurrency Reports
Cryptocurrency likes to market itself as being separate from the government and therefore not taxable. It turns out that this isn’t true. It’s only partially true because congress hasn’t got around to regulating it yet – which they will (better late than never is Congress’s motto) – but even with that in mind, your cryptocurrency is still subject to the taxman. You see, one thing cryptocurrency has failed to do is make itself broadly usable as a currency. For various reasons, the currency is too volatile and slow to be usable for general purposes. The crypto sphere has spent more time making it look like you can use crypto than making it possible to use.
What this means is that cryptocurrency has become more of an investment than a currency. To use investments, you have to convert it back to real currency. That process leaves you subject to taxes. So, if you’ve bought and sold cryptocurrency, be sure to have reports on it ready. The taxman will expect to have the info.
2. Affiliated Income
Do you have an affiliated business? Do you get paid to recommend a business or service to your own clients? If you do, that income is taxable. Don’t forget to include it.
3. Interest Payments
Interest that you gain from a savings account, loan, or other transaction is also taxable. This also includes things like dividends, treasury bonds, even interest given on late tax refunds. If it’s income in any form, it’s usually taxable.
4. The 1099-K
The 1099-K is the form for third-party network transactions and credit card processors. There’s a lot of businesses out there that handle your credit card and payment transactions. If you use them – and if you run any kind of business that accepts credit cards, you probably do, you have to file a 1099-K. You should have received the form in January and hopefully you didn’t forget it.
5. Unemployment
A big worry for a lot of people during the pandemic was if stimulus payments would be taxable. While 2021 didn’t see many stimulus payments, what was true during 2020 is still true now. Stimulus payments are not taxable.
However, the tax credit exemption for unemployment has been allowed to expire. For 2020, your unemployment benefits were made non-taxable, but this will no longer be the case. You should expect to pay regular taxes on unemployment income.
Photo by Oleg Magni
Get Your Taxes Ready!
Tax season is here and the due date is coming. If you haven’t got your taxes done now, then you need to get on that right away. Hopefully, you’ve been taking our advice and getting your taxes ready regularly. You might even have been filing payments early. This is the best advice to avoid the kind of rush to get things done that some people might be making now. If you haven’t got it done yet, now’s the time to get on it.
We can help you out. Get in touch with us to see how.