Tax season is officially here. Are you prepared? Given the pandemic, this is one of the nation’s most important filing seasons ever. From an unstable economy and employment landscape to unemployment checks and pandemic relief packages, these situations will have an impact on your tax filing. Our CPA can guide you and file your tax returns for you!
Here are important reminders before filing 2020 tax returns.
E-File for Quicker Returns
Filing by paper can take more than four to six weeks to process, so the IRS recommends filing electronically and choosing direct deposit to receive your refunds in a quick, safe, and secure way.
Qualify for Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is a refundable tax credit for taxpayers with low to moderate income. To qualify for this financial boost, you must have what qualifies as earned income and meet certain adjusted gross income (AGI) and credit limits for the current, previous and upcoming tax years.
Pay Taxes on Your Unemployment Compensation
Millions of workers received unemployment benefits in 2020. While some taxpayers chose to have federal taxes withheld from their unemployment benefits or make estimated payments, others elected to bypass these options. In this case, taxes will need to be paid when the tax return is filed.
Report Your Interest Payments
If you received interest from the IRS on your 2019 tax returns, you’ll need to report the interest on their 2020 federal income tax return. The interest payments were mostly the result of the postponed filing deadline of July 15 due to the COVID-19 pandemic.
The IRS sent a Form 1099-INT to anyone who receives interest totaling at least $10.
Take Advantage of the Home Office Deduction
Self-employed taxpayers who use a portion of their home exclusively for conducting business qualify for the home office deduction. Unfortunately, employees who received a W-2 from an employer are not eligible for the deduction, even if they’ve been working from home during the pandemic.
Contact America’s Top Tax Experts
If you are in need of tax preparation services or unable to pay your tax debt in full, you may qualify to have your debt settled for less than the full amount owed. Our Tax Relief Experts here at US Tax Shield perform this type of negotiation daily. Tax relief services are designed to help taxpayers who have fallen behind on their tax payments or are already facing aggressive collection actions by the IRS or state tax agency. If you owe money to the IRS or State, US Tax Shield can help you turn your situation around, whether it’s a personal or business tax debt.
