TIPS: 2021 Tax Filing Season

Seasons Greetings,
The year 2020 is like no other year I've experience. How about you? Unfortunately, some things never change and taxes is one of them. With that said, here are some quick tips to consider as we go through the holidays and right into 2021 tax filing season:

1. Income forms, like Form W-2 and other wage statements should be received by February 1, 2021. Let's not forget any other applicable income reportable income such as virtual currencies, unemployment income, refund interest and income from the gig economy. Ensure your addresses, names, and contact information are all updated now.
2. There's a $300 charitable donation allowed 'Above The Line' that were made to qualifying charities. The TCJA discouraged charitable donations when it was introduced. Sadly, COVID-19 came and people are in need. Donate if you can. Save the receipt and/or obtain a tax form to give to your Tax Professional.
3. Taxpayers may also need Notice 1444, Economic Impact Payment, which shows how much of a payment they received in 2020. This amount is needed to calculate any Recovery Rebate Credit they may be eligible for when they file their federal income tax return in 2021. People who didn't receive an Economic Impact Payment in 2020 may qualify for the Recovery Rebate Credit when they file their 2020 taxes in 2021.
4. Taxpayers with an Individual Tax Identification Number (ITIN) should ensure it hasn't expired before filing a tax return in 2021.
5. Taxpayers receiving substantial amounts of non-wage income like self-employment income, investment income, taxable Social Security benefits and in some instances, pension and annuity income, should make quarterly estimated tax payments. The last payment for 2020 is due on Jan. 15, 2021.

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STIMULUS PACKAGE
As you can see, the biggest beneficiaries of the stimulus package were businesses who employed staff to fulfill the business' purpose. Note, however, Sole Proprietors, Independent Contractors, and Self-Employed individuals may also be eligible to apply and receive a forgivable loan.

We are experiencing some difficult economic times, so ensure to make use of any opportunity available to mitigate those difficult circumstances.