Better Late Than Never?

Tax Season is here!

You may have heard that the IRS made the decision to delay to opening of e-Filing to Friday February 12th instead of the regular January 31st. “why?”, you may ask. Well, they wanted to focus on distributing the 2nd round of COVID stimulus and they needed to update the programming of the new tax related regulations passed by Congress in late December. These are both VERY good reasons to delay the start.

But don’t get lazy, the normal end to the regular filing season is still April 15th (a Thursday this year.)

Here are a few highlights for the 2020 filing season:

Publication 17 – “Your Federal Income Tax – For Individuals” has been updated to include all the various changes due to COVID response. Check out page 1 “What’s New” in this 136 page document for the highlights
Did you not receive an Economic Impact Payment in April of this January. Or maybe it was not the full amount? You can claim any underpayment as a Recovery Rebate Credit on Line 30 of their 1040 or 1040-SR this year. You will need an online account to check your filing history and access the “Rebate Tool” to help you calculate the credit. You can sign up here: IRS.gov/secureaccess Of course I will put this on our checklist too.
Retirement account contributions and required distribution rules were relaxed. Over 70, you can contribute to your IRA this year!
Charitable Donations will be deductible even if you use the standard deduction! Up to $300.00 of cash donations can be claimed.
Thank You Teachers! Please list out your expenses related to PPE, disinfectant and other supplies used in the classroom to keep your kids (and you) safe. And THANK YOU for all you do!
Did you collect Unemployment in 2020? You are not alone! Congress is currently looking at making Unemployment Benefits exempt from taxes (like forgiven PPP loans are) to help relieve the burden for folks already struggling to make ends meet. Along with several other Deductions and income forgiveness is under review and will likely be made RETRO-ACTIVE. So I am recommending we all get our paper-work together and be ready to go, but hold off submitting to the IRS until we hear more. The Tax software I use will be updated while the ink dries, and then we can queue up your Return for e-Filing.
The IRS is planning on meeting its promise to processes all e-Filed Returns within 21 days. The excepts are for Returns claiming and Earned Income Tax Credit or Additional Child Tax Credit – as they are required to pass through an additional human screening process.
e-Filing will be easier as more forms will be accepted with remotely obtained signatures (think Docu-sign) via the same e-File platform as your returns. This means fewer paper forms to fill-out and faster refunds.

Wow! That is quite the list. As always, have questions, give me a shout.

Be well and be safe.

~Barb