New For 2020
When it comes to tax laws and policies, changes are constantly taking place. For the 2020 tax year, here are a few of them to take into consideration as you prepare to file. Some may seem minor but may be beneficial to you. If it impacts your tax situation, you should make sure that you and your tax professional explore them to get you the maximum refund possible.
- Recovery Rebate Credit – Due to COVID-19, stimulus payments were issued to eligible taxpayers in 2020. Single filers received $1,200 and taxpayers filing a joint return received $2,400, with an additional $500 for each eligible dependent. The payments were disbursed based on data from the 2018 & 2019 filed tax returns. For eligible taxpayers that did not receive those payments, a credit can be claimed on their 2020 tax returns. (see the IRS link below for eligibility) https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-a-eip-eligibility)
- Charitable Deduction Allowance – If you made cash contributions to qualified charitable organizations for 2020, you will be allowed to take a deduction up to $300, even if you do not itemize. You can review the IRS publication 526 for further details on this.
- Refund Interest Payment – Interest income is reported on Form 1099-INT, for amounts that are at least $10. The IRS issued interest payments for taxpayers who timely filed their 2019 tax returns by July 15, 2020. These interest payments are taxable and must be reported on your 2020 tax returns.
Other Reminders
- Timeline for Refunds– Keep in mind that some tax returns may go through additional review processes and may take a bit longer for taxpayers to receive them. For example, returns with claims for the earned income tax credit (EITC) or the additional child tax credit (ACTC) cannot be issued before mid-February.
- Tracking Refunds – The IRS tool, Where’s My Refund, can be used to track the status of your refund after your return has been received for processing. (https://www.irs.gov/refunds)
Again, these are just a few tips and changes to guide you along. To receive additional tips and updates, please subscribe to my blog @: https://slsaccountingsvcs.com/blog/
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