The clock is ticking for the self-employed to claim forgotten 2021 tax credits

May 31, 2024

Claiming available tax credits, especially for self-employed individuals hit hard by the pandemic, can significantly reduce your financial burden and keep more money in your pocket.

No matter if you’re swimming in wealth or just scraping by, taxes can feel like a heavy load to bear. That’s why it’s crucial to explore every avenue for saving on your taxes. One effective way to accomplish this is to claim the tax credits you qualify for, which can notably reduce your tax burden and keep more money in your pocket.

A Look Back at 2020

Now, let's turn back the clock to 2020 - a chaotic year that marked the onset of the COVID-19 pandemic. The year that turned our lives upside down in ways we never imagined. We found ourselves working from home, juggling our kids' virtual schooling, and taking care of loved ones who had the infection. These unprecedented challenges stretched Americans to their limits, pushing us to adapt and cope with new realities almost overnight.

The Struggles of the Self-Employed

This was especially true for the self-employed. While every American faced hardships, those running their own businesses had even fewer safety nets to fall back on. They couldn't rely on sick pay or family leave like traditional employees could. Every day off to manage pandemic-related challenges meant a direct hit to their income, leaving them scrambling to find ways to stay afloat financially.

Congress and IRS to the Rescue

But Congress and the IRS were well aware of how self-employed taxpayers were faring in this troubled economic context. As such, they were quick to introduce two refundable income tax credit mechanisms that sole entrepreneurs could use to alleviate the consequences of the pandemic.

Claim Your Credits

You can apply for the Self-Employed Tax Credit (SETC). Rolled as part of the American Rescue Plan Act, the program is suitable for almost everyone with Schedule C income - sole proprietors, 1099 contractors, freelancers, single-member LLCs, and gig workers - allowing you to recoup up to $32,000 in lost wages. The deadline for applications for 2021 tax returns is April 15, 2025.

Time Is Running Out

As April 2025 draws near, you need to act quickly and consult with your tax professional about the programs. Missing out on these pandemic relief mechanisms means losing a valuable opportunity to ease your financial load for the tax year. So, don't wait—check your eligibility now and secure those savings before time runs out!

Find out how much you're eligible for here.

This content is provided in partnership with the Evolved Profits Partner and is intended for informational purposes only. The views, opinions, and advice expressed in this article are solely those of Evolved Profits Partner and do not necessarily reflect the views or policies of any other individual, organization, or entity.

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