19 Nov Be Prepared for Next Tax Season
It is not too early to start preparing for the 2020 tax filing season (due April 15th 2021). We’re hopeful there are no additional delays next year! Keep this list handy when tax forms start coming in January.
Documents You Need
- Forms W-2 from employers
- Forms 1099 from banks and other payers
- Other income documents and records of virtual currency transactions.
Include your Notice 1444 Your Economic Tax Payment with your tax records if you received an Economic Impact Payment.
View your account information to see information from your most recently filed tax return.
Notify the IRS if your address changes and notify the Social Security Administration of a legal name change.
Remember, most income is taxable. This includes:
- unemployment income,
- refund interest,
- income from the gig economy, and
- virtual currencies.
Use the Tax Withholding Estimator to help you determine the right amount of tax to have withheld from your paycheck. This tool will help determine if you need to adjust your withholding and submit a new Form W-4 to your employer. Consider estimated tax payments. If you receive a substantial amount of non-wage income like self-employment income, investment income, taxable Social Security benefits and in some instances, pension and annuity income you should make quarterly estimated tax payments, with the last payment for 2020 due on Jan. 15, 2021.
What’s New for 2021
You may be able to claim the Recovery Rebate Credit on your Tax Year 2020 Federal income tax return if you met the eligibility criteria in 2020 and:
- You didn’t receive an Economic Impact Payment, or
- Your Economic Impact Payment was less than $1,200 ($2,400 if married filing jointly for 2019 or 2018) plus $500 for each qualifying child you had in 2020.
- For additional information about the Economic Impact Payment, visit the Economic Impact Payment Information Center.
- If you received a federal tax refund, you may have been paid interest. Interest payments are taxable and must be reported on your 2020 federal income tax return. In January 2021, the IRS will send a Form 1099-INT to anyone who receives interest totaling at least $10.
Its never too early to schedule your appointment either. Call us today and book your time with our accountants.