As a business owner, you’re probably wondering whether taxes are going to go up or down next year. The answer to that question may depend on the type of business you have, your income, and where we stand when it comes to the pandemic. Furthermore, the political climate may influence how taxes will change in 2021. Here’s what you need to know as a business owner:
1. Taxes may increase if there’s a deficit after the pandemic
The pandemic has caused many people to lose their jobs, which has put an extensive strain on the economy. As a result, there has been an increased need for government programs that help out struggling businesses and individuals. If the pandemic continues for an extended period of time, this could cause a serious deficit to develop, which may lead to increased taxes for a time to pay back the lost funds.
2. Filing deadlines could be delayed by the pandemic
Due to the pandemic, filing deadlines were extended this year. Therefore, if cases continue to surge, it’s possible that deadlines could be extended again in response to the pandemic. However, whether or not deadlines are extended will depend on the severity of the second wave. If there is a severe second wave, the economy could be hit even harder than it already has been, which may lead to another extension of filing deadlines.
3. New coronavirus relief packages may be offered, which could affect taxes
If coronavirus relief packages are offered in 2021, this may result in a lower tax burden next year. However, it’s not known if relief packages will be needed in 2021. Even if relief packages are offered, it’s difficult to predict what will be included in them.
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