How to Repay Deferred Social Security Tax

How to Repay Deferred Social Security Tax

How Self-Employed Individuals and Household Employers Repay Deferred Social Security Tax

The Coronavirus Aid, Relief, and Economic Security Act allowed self-employed individuals and household employers to defer the payment of certain Social Security taxes on their Form 1040 for tax year 2020 over the next two years. Half of the deferred Social Security tax is due by December 31, 2021, and the remainder is due by December 31, 2022. Since this date is approaching quickly, we’ve outlined how to repay deferred social security tax below.

How Individuals Can Repay The Deferred Taxes

Individuals can pay the deferred amount any time on or before the due date. They:

Individuals making deferred Social Security tax payments in EFTPS should select 1040 US Individual Income Tax Returns and deferred Social Security tax for the type of payment. They must apply the payment to the 2020 tax year where they deferred the payment. Taxpayers can visit EFTPS.gov for details.

Those using Direct Pay should select the reason for payment “balance due.” If they are using the Card Program to pay with a debit or credit card, they should select “installment agreement.” They should apply the payment to the 2020 tax year where the payment was deferred.

For further assistance, contact a financial advisor from Haynie & Company CPA firm. With our decades of small business expertise, we’re here to answer any questions you may have, from tax planning and tax liability to bookkeeping services and payroll services!

What Individuals Should Do If They Are Unable To Pay In Full By The Installment Due Date

Individuals who are unable to pay the full deferred tax amount should pay whatever they are able to pay by the installment due dates to limit penalty and interest charges.

If the installment amount is not paid in full, IRS will send the taxpayer a balance due notice. Taxpayers should follow instructions on the notice to make a payment or apply for a payment plan. They can also visit the Paying Your Taxes page on IRS.gov for additional information about ways they can pay, what to do when they can’t pay, and viewing their tax account.

View full article on IRS Website

Notice CP256V

The IRS will be sending out notices that deferred payroll taxes from 2020 are due December 31, 2021. Get details about Notice CP256V here.

For Help Making Sense of Your Financial Records, Turn to the Certified Public Accountants at Haynie & Company

Does the mere thought of your financial statements give you a headache? Help is here!

Since 1960, our accounting firm has shown individuals and small business owners how to save and manage money. If you need guidance with filing taxes or repaying deferred social security tax, contact us now.

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