Some Helpful Tax Tips to Take on the 2020 Tax Season

ByCandace Anderson - Managing Consultant and Certified Diversity Practitioner

As we all look to finally put 2020 behind us, one last thing remains — filing taxes.

Feb. 12 is the official start of the tax season, as that is when the Internal Revenue Service will begin accepting and processing 2020 tax year returns. To speed refunds with the ongoing pandemic, the IRS urges taxpayers to file electronically with direct deposit as soon as they have all necessary documents.

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Here are some tips to make filing easier:

  • As stated above, file electronically and use direct deposit for the quickest refunds.

  • IRS.gov has the latest tax information for your reference and is much more efficient than calling.

  • Individuals or families that may be eligible for stimulus payments should carefully review the guidelines for the Recovery Rebate Credit. Most people received Economic Impact Payments automatically, and anyone who received the maximum amount does not need to include any information about their payments when they file. However, those who did not receive a payment or only received a partial payment may be eligible to claim the Recovery Rebate Credit when they file their 2020 tax return. Tax preparation software will help taxpayers figure the amount.

  • Advance stimulus payments received separately are not taxable and will not reduce a taxpayer’s refund.

Things to keep in mind while filing:

  • Tax Day is Thursday April 15, 2021 and no change is anticipated. This deadline was extended last year due to the impact of COVID-19.

  • The standard deduction for 2020 increased to $12,400 for single filers and $24,800 for married couples filing jointly.

  • Income tax brackets increased in 2020 to account for inflation.

  • If you collected unemployment benefits in 2020 and chose not to have taxes withheld when you signed up, then taxes will become due on those funds.

Possible deductions and credits include:

  • Charitable Deductions

  • Medical Deductions

  • Business Deductions

  • Earned Income Tax Credit

  • Child Tax Credit

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There are many resources available to help file your taxes based on your individual situation. If your taxes are simple, there are free and low-cost options online that can guide you through the process. For more complicated situations, it is not a bad idea to reach out to a tax professional to be sure you receive all deductions and credits possible. Happy tax season and here’s to simple filing and fast refunds!

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