The Taxman Cometh


It's that time again to start the preparation of your Income Taxes. OR, as we all say get back what Uncle Sam owes Us.  Filing taxes is one of the most tedious things you'll ever do. The deadline is April  15, 2021 for your 2020 filing, even as tax laws and requirements change. You can always hire a tax specialist to help you reduce your tax burden and maximize your refund. According to a recent National society of accountants it could cost $188 for the simplest Federal & State returns this year. What if . . .You could do your taxes yourself and use that $188 for a new handbag?  This is not far fetched.  For years I did my own taxes, my Son's taxes, My Mom and Sister's taxes right from the small desk in my bedroom at no cost. I used H&R Block and the IRS Free File online programs. Well, it was work to get their records on a timely basis and it was worth some nominal fee, but it was all for loved ones. In 2019 more than 34 million taxpayers paid for tax software to file their Taxes, even though many qualified for Free File.  But, not everyone should file their own taxes. Some multiple incomes are complicated and even the seasoned tax preparer needs some assistance. Let's just say. . . you sold your business, sold your house and moved to another state - You are going to need a professional or better yet an Accountant to file your income taxes. But, if all you have is one or two streams of income and have all your records, then you should try one of the Free online tax filing programs available:

Just about everyone is waiting for the third STIMMY (stimulus check), bringing up to $1,400 per person in your household. The $1.9 trillion stimulus bill was signed into law. But, what happens if you're missing your first stimulus check or your second check, for you or your dependents?  Well, now that tax season has arrived, you should file Early and file a Recovery Rebate Credit on your 2020 return for any missing Stimmys.  And, you could benefit if you qualify for more money in a third stimulus check if the IRS uses your 2020 taxes instead of your 2019 taxes. It all depends on your 2020 AGI.

Unemployment numbers surged in 2020, topping out at 14.7% in April, as the COVID-19 pandemic carved a path through the US economy, leaving millions of Americans out of work. It was unemployment insurance that provided a lifeline to many folks struggling to get by and many people received unemployment checks in 2020. Do you have to pay taxes on unemployment? Short answer: YES.  The IRS considers unemployment benefits "taxable income."  When filing for tax year 2020, your unemployment checks will be counted as income, taxed at your regular rate. This applies both to standard unemployment benefits and the expanded benefits that were available to some during 2020. Given that you're not required to have federal taxes withheld from your benefit payments, many people opt not to, electing to kick the tax can down the road. And, it has shown up on their door steps. 

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Before exploring any payment paths, be aware there could be some trade-offs you need to know about that could influence when you file & how you file. Millions of Americans are expected to file a tax extension this year due to complexities stemming from Unemployment insurance, and for businesses, Payroll Protection Program loans, not stimulus checks. You need to lay all your cards on the table and have the discussion with your Tax professional, before Anxiety creeps in.

You can track your stimulus check Here.  And, once you File you can also track your 2020 tax return.  You still have a month to get your taxes filed by the April 15 deadline, and whenever you do submit your filings, you can use an IRS tool to show you if your tax return has been processed, and track any refund you might get. With 7 million tax returns delayed or "in limbo," according to The Washington Post, this tool is important in setting your expectations. Remember, your Social Security Income is NOT taxable. Therefore, if it is your only income there is no Anxiety and No refund. As usual, a tax refund gives you back any money you overpaid throughout the year (such as through your company's withholding or a quarterly estimate). This year, your refund could also include any missing stimulus check money you didn't receive. Now, that is reason enough to file early. Right! 


The more you Know, the more you Grow!

** Thanks for Visiting. This post is ForYourEdutainment (FYE).  I am not a Financial Counselor nor an Accountant - Just a woman on this life journey. If you like it, please leave a comment & Share, Share, Share.  Don’t forget to follow me on Bloglovin  for new post updates, and on Pinterest**

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