It is that time of year to begin to think about filing your 2020 income tax return.  Below are a few suggestions to make that task a bit less onerous.

1. Gather Your Tax Records.  Organized records make tax preparation easier.  It can also possibly help you find deductions or credits that you might have overlooked. 

Include in your records:

• Form(s) W2 from employer(s)
• Form(s) 1099 from banks or brokerage firms
• Other income documents and records of virtual currency transactions.
• Notice 1444 Your Economic Tax Payment if you received an Economic Impact Payment.
• Your prior year tax return
• Unemployment income if any
• Refund interest if any
• Self-employed income and expenses
• Income from virtual currency trades
• Form 1099T for education expenses

2. Check your ITIN if this applies to you. This is not the same thing as your social security number.  Make sure that your ITIN has not expired.  If you need to renew your ITIN, file form W7 with IRS.  You can find form W7 at the IRS.gov website.

3. Make sure you have withheld enough tax.  To help you determine if you have paid in enough taxes IRS has a handy Tax Withholding Estimator worksheet that you can use.  This worksheet can be found at the IRS.gov website.  If you have not withheld at least 90% of your estimated tax liability, consider making estimated tax payments.  The last date 2020 tax payments can be made is January 15, 2021.

4. Recovery Rebate Credit.  You might be eligible to claim the Recovery Rebate if you meet certain eligibility requirement in 2020 and:

(a) You did not receive an Economic Impact Payment (EIP), or

(b) Your EIP was less than $1,200 ($2,400 for married filing jointly for 2019 or 2018) plus $500 per each qualifying child you had in 2020.

c. For additional information go to IRS website IRS.gov/coronavirus/economic-impact-payment-information-center.

5. Refund interest payments.  Interest is generally paid on tax refunds paid to taxpayer.  If you received a refund when you filed your 2019 tax return, you were probably paid interest on that refund.  That interest income is taxable.  You will receive a form 1099-INT from the federal government if you received more than $10 in interest income.

Consider using a tax professional for the preparation of your income tax return.  They are up to date on the latest tax law changes and keep abreast of key deductions and credits available to individuals and businesses.  If you have any questions, please give Kathy Nelson a call at 561-789-8060, she will be happy to discuss your tax return with you and give you a complimentary review of your 2019 tax return.