Preparing to file your 2020 tax return in the midst of the ongoing COVID-19 pandemic can often raise more questions than answers. Thankfully, we have a number of tax tips for those gathering their income information and reaching out to their tax professionals. We recommend not filing your tax return until after you’ve read over these tips. They will definitely make it easier on you.
File Your 2020 Return Early and Electronically
The IRS is going to begin processing 2020 tax returns on February 12th, so the sooner that you get your submitted, the better. Since 2019 tax returns were subject to an extended deadline, many people waited to submit theirs, leading to an IRS backlog. As they continue going through those returns, new ones – those from 2020 – are going to end up in that same pile. It’s advised that in order not to end up having to wait a long time for a tax refund, you send your complete return in as soon as possible.
Also, it’s advised that you file your tax return electronically through one of the e-File systems available, rather than submit a paper return. This will make the process go more smoothly, making you more likely to receive your tax refund within weeks, instead of within months, as it prevents it from getting lost or set aside in their paperwork backlog.
The Tax Deadline is in April Once Again
Unlike last year when the filing date for 2019 returns was moved back to July, the filing date for this year’s tax returns is back to the standard April 15th deadline. Unless things change in the near future, be prepared to file your return according to previous years. Mistakenly waiting for July can lead to having to pay penalties and fines because your return will be considered late.
Your Stimulus Check Doesn’t Count as Income
If you’re one of the over 98% of Americans who received a stimulus check from the federal government last year, either the $1,200 (depending on your income and family size) last April or the $600 in December, then you’re in luck. Those amounts don’t count as income, so you won’t have to pay taxes on them.
You Can Deduct Up to $300 in Charitable Income
If you gave up to $300 to charities during 2020, and don’t plan on itemizing your deductions, then, thanks to the CARES Act, you can deduct that amount from your taxes. It appears as an above the line deduction, meaning that it lowers your gross income, and therefore, the amount of income that you are taxed on.
If you have questions about filing your 2020 taxes or are worried how the COVID-19 pandemic will affect your taxes this year, then reach out to the tax advisors at Enterprise Consultants Group. We can answer your questions, discuss your rights, and provide actionable options. Please contact us online or at (800) 575-9284 today to schedule a free and confidential consultation to see how we can help you.
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