The IDEA Publishing
  • HOME
  • Popular IDEAS
    • IDEAS for Your Better Business Life >
      • The Business Idea
      • The Career IDEA
      • The Money Idea
    • IDEAS for Your Better Diversions >
      • The Tech IDEA
      • The Travel IDEA
      • The Auto IDEA
      • The Outdoors IDEA
    • IDEAS for a Better Table >
      • The Food IDEA
      • IDEAS de Cocina Espanola
    • IDEAS for a Better You >
      • The Health IDEA
      • Living Well IDEAS
      • The Fitness IDEA
      • The Beauty IDEA
    • IDEAS for a Happier Home >
      • The Home Idea
      • The Entertaining Idea
      • The Parenting Idea
      • The Senior Living IDEA
      • The Pet IDEA
  • The Video Domain
    • Video IDEAS for Your Better Business Life
  • About
  • Contact
  • ads.txt
The_Money_IDEAThe Money IDEA

The Money IDEA

Ideas on How to Save and Ideas for What to Do with Your Savings!

Tax season 2020 will look different: Here's how to prepare

1/13/2021

Comments

 
couple-meeting-tax-prep

Tax season 2020 will look different: Here's how to prepare

(BPT) - It’s no secret that 2020 has been a tumultuous year. Due to the COVID-19 pandemic, many Americans found themselves out of work — at least temporarily — and received unemployment benefits. Others may have experienced employment changes, like working from home or taking on multiple jobs. All of these factors will have even more of an impact come time to file income taxes on tax day, April 15, 2021.

“For many, the 2020 tax season will likely look different,” says Mark Steber, Chief Tax Information Officer at Jackson Hewitt Tax Services. “The pandemic brought unexpected, overwhelming changes.”

To help you prepare and get the maximum tax refund you deserve, Steber offers the following tax tips.

1. Understand how unemployment benefits work

If you received unemployment benefits this year, it may have been for the first time. Make sure you’re aware of how they affect your taxes.

Unemployment benefits are taxable and must be reported to the IRS on your tax return. Taxable benefits also include any special compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act earlier this year. That means if you did not withhold enough taxes from your unemployment benefits, you could see a big tax bill or a much smaller tax refund than you normally receive.

Unemployment benefits can affect tax credits. Unemployment is considered unearned income, so it won’t count toward certain credits. For example, you must have earned income to qualify for the Child Tax Credit or the Earned Income Tax Credit. Additionally, your adjusted gross income must be below certain levels to get certain credits.

2. Set money aside to cover unexpected taxes

If you received unemployment benefits and did not withhold any federal or state income tax, you’ll need to pay tax on that money. To prepare, consider setting money aside now to cover those taxes on your 2020 return and brace yourself for a much smaller refund or no refund at all this tax season.

3. Take advantage of possible deductions

Every taxpayer will get a charitable donation deduction for 2020. Make a list of any IRS-approved donations you made this year and locate any receipts. Whether itemizing or taking the standard deduction, under the CARES Act, all taxpayers are eligible to deduct up to $300 worth of monetary donations to qualified organizations.

And while many Americans have been working at home for months, a home office deduction is not guaranteed. The home office deduction is only available to those who are self-employed.

4. Consider major life changes

Life goes on, even during a pandemic, and life changes can bring sizeable tax implications. Some changes that cause the biggest impact include getting married or divorced, having a baby or adopting a child, buying or selling property, retiring, or starting a business. If you experienced any of these events in 2020, know that your return will look different.

5. Keep track of important documents

Even if your taxes won’t be affected by unemployment, make sure you gather all your documents, such as W-2 forms and 1099s for interest dividends and even retirement distributions. Remember to include the Notice 1444 you received with your stimulus check for your 2020 tax records. Collect your charitable contribution totals, mortgage interest, property taxes you’ve paid, and any additional state and local income taxes paid for the year. If you were furloughed and able to pick up a temporary job, gather your W-2s for each job you worked. If you worked a side gig, make sure to keep a record of your income, the miles you drove, and any additional expenses. And if you’re not filing single, be on the lookout for family members that may have been impacted to make your tax return more complicated.

No matter your 2020 situation, follow these tips to prepare for any unexpected tax implications. For more information and help during the 2020 tax season, visit jacksonhewitt.com.

Comments

4 life changes that affect your taxes and how to tackle them

2/23/2017

Comments

 
Picture


(BPT) - Life changes often mean tax changes. Whether it’s getting married, buying or selling a home, moving abroad or having a baby, misunderstanding the tax and financial implications of these life changes can lead to taxpayers making mistakes or leaving money on the table.

Depending on your situation, there are new tax implications that will impact your benefits, tax bill and how you file. If you experienced a life change in 2016, here is a list of tax implications and how they will affect you.


Marriage

Many couples close the book on their "wedding to-dos" once the last thank you card has been sent, but looking at your new tax situation is an important first step in your married life. There are some instances when getting married can have negative implications for a couple’s tax situation. Once you’re married you must file either as married filing jointly or married filing separately. In some cases, a couple where one spouse earns most of the household income will benefit because their overall tax bracket may decrease. However, a couple with two high earners may find they face a higher tax rate than if each paid tax only on their own income and added the taxes paid.

However, there are some ways to protect against potential negative tax implications. After your marriage is official, update your W-4 with your employer to account for your new marital status. If you’re self-employed or a small business owner, make sure to adjust your quarterly estimated tax payments.


Buying a house

Purchasing a home may open the door to more deductions through itemizing if you weren’t already doing so. Once you become a homeowner, you can deduct many of your home-related costs, including your qualified home mortgage interest, points paid on a loan secured by your home, real estate taxes and private mortgage insurance premiums paid on or before Dec. 31, 2016. If you choose not to itemize, you may benefit from other tax advantages such as penalty-free IRA withdrawals if you are a first-time homebuyer under the age of 59 and a half, or residential energy credits for purchases of certain energy efficient property.

New homebuyers should be on the lookout for Form 1098 Mortgage Interest Statement, which is used to report mortgage interest. This form can help you identify these deductions when completing your Form 1040.


Moving abroad

Are you excited to move abroad, but have no idea what will happen to your taxes and how to file? Many Americans living and working overseas will not owe tax to the IRS because of the foreign earned income exclusion and foreign tax credit. However, even if you qualify for those benefits, you have to file a U.S. tax return each year if you received income over the normal filing threshold.

It is also important to understand your Social Security coverage before moving abroad. Knowing whether your earnings overseas will be subjected to Social Security taxes in the U.S. or the country you are residing in will be an important factor when analyzing the economics of your move.


Having a baby

A new baby means you may be able to take advantage of tax breaks, including the Child Tax Credit (CTC). The CTC is worth up to $1,000 for each qualifying child younger than 17, a portion of which may be refundable as the Additional Child Tax Credit (ACTC) depending on your income. A tax preparer can help you understand the qualifications to determine whether a child is considered qualified for purposes of the CTC. Some of those qualifications include but are not limited to their relationship and residency.

You may also qualify for the Earned Income Tax Credit (EITC) which is a benefit for working people with low to moderate income that reduces the amount of taxes you owe. However, it’s important to note that due to the new “Protecting Americans from Tax Hikes ACT” or PATH Act, this year the IRS is required to hold any refund from those claiming the EITC and ACTC until at least Feb. 15. This delay will be widely felt by tax filers who typically file as soon as the IRS accepts e-filed returns and who normally expect to receive their refund by late January.

To learn more about this new tax law change, how it may delay tax refunds in January and February, and H&R Block’s free solution to this delay, visit www.hrblock.com/refundadvance or make an appointment with a tax professional.



KEYWORDS

  • birth
  • BPT
  • Brandpoint Content
  • child
  • children
  • Child Tax Credit
  • Earned Income Tax Credit
  • EITC ×
  • families
  • family
  • federal government
  • income
  • income taxes
  • marriage
  • move
  • moving
  • tax credits
  • tax deductions
  • taxes
  • tax preparation
  • Washington

Comments



    Archives

    January 2021
    December 2020
    September 2020
    August 2020
    June 2020
    May 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    December 2017
    November 2017
    September 2017
    August 2017
    July 2017
    June 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016


    Interested in Publishing on The Money Idea?
    Send your query to the Publisher today!

    Categories

    All
    1040
    1040a
    1040EZ
    1099
    401k
    401(k)
    Accident
    Accident Insurance
    Accidents
    Account Information
    Accounting
    Accounts
    Advertising
    Advice
    African-American
    African-Americans
    Age
    Aging
    Amazon
    Analysis
    Annual
    Annual Enrollment
    Annuities
    Annuity
    Antique
    Antiques
    Appraisal
    Apps
    April 15th
    Assets
    Assisted Living
    Attorney
    Auto Insurance
    Auto Loan
    Automatic Payments
    Automobile
    Autopay
    Baby
    Bank
    Banking
    Bankruptcy
    Banks
    Benefits
    Bills
    Birth
    Bonds
    Borrower
    Borrowing
    BPT
    Brandpoint
    Brandpoint Content
    Budget
    Budgeting
    Calculator
    Cancer
    Capital
    Capital Gains
    Car
    Car Accident
    Career
    Careers
    Car Insurance
    Car Loan
    Cars
    Cash
    Cash Flow
    Casinos
    CBS This Morning
    CD
    Center For Financial Services Innovation
    Certainty
    Charitable
    Charity
    Check
    Checking
    Checks
    Child
    Children
    Child Tax Credit
    Choices
    City
    Claim
    Claims
    Closing Costs
    Collateral
    Collectibles
    College
    College Loans
    Communications
    Community
    Companies
    Comparison
    Compensation
    Compound Interest
    Compunding
    Computer
    Computers
    Conflicts Of Interest
    Consumer
    Consumer Protection
    Consumers
    Consumption
    Contract
    Contributions
    Convenience
    Conversion
    Copayment
    Copayments
    Coronavirus
    Cost Of Living
    Costs
    Couples
    Court
    Coverage
    CPA
    Credit
    Credit Card
    Credit Cards
    Credit History
    Credit Report
    Credit Reports
    Credits
    Credit Score
    Credit Union
    Crime
    Criminal
    Crisis
    Critical Illness Insurance
    Cybercrime
    Cybersecurity
    Data
    Dates
    Death
    Debit Card
    Debt
    Debts
    Deductibles
    Deductions
    Deferred Compensation
    Defined Contribution
    Delivery
    Demographics
    Department Of Housing And Urban Development
    Design
    Destinations
    Diamond
    Digital
    Disability
    Disability Insurance
    Discount
    Discounts
    Distribution
    Distributions
    Diversification
    Doctor
    Doctors
    Documents
    Donations
    Down Payment
    Down-payment
    Earned Income Tax Credit
    Earnings
    EBay
    Ecommerce
    Economics
    Economy
    Education
    Educational
    EITC
    Eligibility
    Email
    Emergency
    Emergency Fund
    Emergency Plan
    Employee
    Employee Benefits
    Employer
    Energy
    Entertainment
    Environmental
    Equity
    Estate
    Estate Planning
    Estates
    Ethnic
    Ethnicity
    Exemptions
    Expenses
    Expert
    Expertise
    Experts
    Families
    Family
    Family Features
    Family Finances
    FASB
    Fashion
    Federal Government
    Federal Housing Administration
    Fees
    FHA
    Filing
    Finance
    Finances
    Financial
    Financial Advisor
    Financial Crisis
    Financial Institutions
    Financial Plan
    Financial Planning
    Financial Setbacks
    Financial Strategy
    Fixed Income
    Flood Insurance
    Fraud
    Future
    Gambling
    Gaming
    Generic Drugs
    Gifts
    Goals
    Gold
    Government
    Green
    Groceries
    Grocery
    Growth
    Guide
    Hacks
    Health
    Health Care
    Health Insurance
    Health Savings Account
    Heirs
    Higher Education
    Hobby
    Holiday
    Home
    Homebuyers
    Homebuying
    Home Equity
    Home Equity Conversion Mortgage
    Home Improvement
    Home Insurance
    Home Loan
    Homeowners
    Homeownership
    Home Ownership
    Homeowners Insurance
    Home Repairs
    Homes
    Home Security
    Home Warranty
    Hospital
    House
    Household
    Housing
    HSA
    HUD
    ID
    Identification
    Identity Theft
    Incentives
    Income
    Incomes
    Income Tax
    Income Taxes
    Individual Investor
    Information
    Injury
    Insurance
    Insurance Claim
    Insurance Company
    Insurance Policy
    Insurance Rates
    Interest
    Interest Rates
    Internal Revenue Service
    Internet
    Investing
    Investments
    IRA
    IRS
    Itemize
    Jewelry
    Job
    Job Loss
    Jobs
    Kids
    Land
    Laptop
    Law
    Lawsuit
    Lawyer
    Legal
    Lender
    Lending
    Leukemia
    Liability
    Lifehacks
    Life Insurance
    Lifestyle
    Limits
    Line Of Credit
    Literacy
    Litigation
    Loan
    Loans
    Long-term
    Long-term Care
    Loss
    Losses
    Lost Wages
    Management
    Manufactured Home
    Manufactured Homes
    Marginal
    Marketing
    Markets
    Marriage
    Matching
    Medicaid
    Medical
    Medical Bills
    Medicare
    Medium
    Mental Health
    Metro Areas
    MI
    Millennials
    Modular Homes
    Money
    Money Management
    Monthly Budget
    Monthly Payments
    Mortgage
    Mortgage Insurance
    Mortgage Loan
    Motivation
    Move
    Moving
    Myth
    Myths
    Need To Know
    Nestegg
    New Home
    News
    Nursing Homes
    Online
    Online Auction
    Online Banking
    Online Filing
    Online Shopping
    Opportunities
    Opportunity
    Origination Cost
    Parents
    Patients
    Pay
    Paycheck
    Payment
    Payments
    Penalties
    Penalty
    Pension
    Personal Bankruptcy
    Personal Finance
    Personal Finances
    Personal Privacy
    Personal Wealth
    Pets
    Phone
    Plan
    Planning
    PMI
    Policy
    Portfolio
    Premiums
    Prescription Drugs
    Prevention
    Prices
    Pricing
    Priorities
    Privacy
    Property
    Protection
    Prudential
    Psychology
    Purchasing Power
    Qualifications
    Rate Of Return
    Rates
    Real Estate
    Realtor
    Refund
    Regulation
    Relationships
    Relocation
    Rent
    Rental
    Renters
    Renting
    Resale
    Research
    Restaurants
    Retire
    Retirees
    Retirement
    Retirement Account
    Retirement Planning
    Returns
    Reverse Mortgage
    Risk
    Risk Factors
    Risk Tolerance
    Robbery
    Rollover
    Roth IRA
    Safety
    Salary
    Save
    Saving
    Savings
    Scam
    Scams
    Scholarship
    School
    Security
    Senior Care
    Senior Citizens
    Seniors
    Settlement
    Settlements
    Shipping
    Shocks
    Shopping
    Silver
    Skimming
    Smartphone
    Socially Resposible Investing
    Social Security
    Spanish
    Spend
    Spending
    Spouse
    SSDI
    State Taxes
    Stock Market
    Stocks
    Strategy
    Stress
    Style
    Suggestions
    Supply Chain
    Survey
    Sustainability
    Tax
    Tax Consequences
    Tax Credits
    Tax Deadlines
    Tax Deductions
    Taxes
    Tax Filing
    Taxpayers
    Tax Planning
    Tax Preparation
    Tax Refund
    Tax Return
    Tech
    Technology
    Teens
    Terms
    Testing
    Texting
    Theft
    TIAA
    Time
    Tip
    Tips
    Title
    Tools
    Traditions
    Transaction
    Transactions
    TransUnion
    Trend
    Trends
    Tricks
    Trucking
    Trump
    Trusts
    Unemployment
    Unemployment Insurance
    Unexpected Expenses
    UPS
    Urban
    Vacation
    Valuables
    Value
    Veterans
    Volatility
    Voluntary Benefits
    Wages
    Wall Street
    Washington
    Wealth
    Web
    Wedding Rings
    Wife
    Will
    Wills
    Wisconsin
    Withdrawl
    Withholding
    Work
    Workplace
    Worry
    Wow
    Young Adults







    Get this money content for your website with our RSS Feed below!

    RSS Feed

Proudly powered by Weebly
  • HOME
  • Popular IDEAS
    • IDEAS for Your Better Business Life >
      • The Business Idea
      • The Career IDEA
      • The Money Idea
    • IDEAS for Your Better Diversions >
      • The Tech IDEA
      • The Travel IDEA
      • The Auto IDEA
      • The Outdoors IDEA
    • IDEAS for a Better Table >
      • The Food IDEA
      • IDEAS de Cocina Espanola
    • IDEAS for a Better You >
      • The Health IDEA
      • Living Well IDEAS
      • The Fitness IDEA
      • The Beauty IDEA
    • IDEAS for a Happier Home >
      • The Home Idea
      • The Entertaining Idea
      • The Parenting Idea
      • The Senior Living IDEA
      • The Pet IDEA
  • The Video Domain
    • Video IDEAS for Your Better Business Life
  • About
  • Contact
  • ads.txt