What’s New To Consider When Filing Your 2020 Income Taxes

Looking for highlights of items to keep in mind for your 2020 income taxes and the changes that could impact you?  The IRS has a special page on IRS.gov that outlines many tips and explanations about returns for 2020.      

Here are some of the highlights to remember:

• If you received a Recovery Rebate Credit/Economic Impact Payment, KEEP Notice 1444 for tax filing.  If you didn’t receive an Economic Impact Payment or your Economic Impact Payment was less than $1,200 ($2,400 married filing jointly in 2018/2019), plus $500 for each qualifying child, you may be eligible to claim the Recovery Rebate Credit. 
  
• If you received a refund on an overpayment of taxes and received interest on the refund, you will receive a Form 1099-INT if that interest totaled $10.00 or more.  This interest is taxable to you.
  
• As 2020 proved, don’t rely on a refund being received by a certain date.  The time for receipt of refunds is estimated and is not cast in stone.  Therefore, if you want to use your refund, don’t commit to using the refund on a specific date.  Delays can happen….
  
• Also, remember that if you are entitled to the Earned Income Tax Credit or Additional Child Tax Credit, refunds on these returns will not be issued before mid-February.
  
• You can track your refund using Where’s My Refund? on irs.gov.
  
• As mentioned previously, you can use Free File if you meet the income guidelines. 
  
• The IRS is making Identity Protection available to all taxpayers nationwide.  This is a PIN consisting of a six-digit number known only to the taxpayer and the IRS to help in preventing identity theft.  Visit irs.gov and review the Get An Identity Protection PIN details for more information.
  
• Standard deductions for married couples filing jointly rises to $25,100, single taxpayers and married filing separately will be $12,550 and for heads of households, the standard deduction will be $18,800.
  
• Like 2019, there will be no personal exemptions available.
  
• There continues to be no limitation on itemized deductions.
  
• The Alternative Minimum Tax exemption amount for tax year 2021 is $73,600 and begins to phase out at $523,600 ($114,600 for married filing jointly the exempt begins to phase out at $1,047,200).  The exemption for 2020 was $72,900 and began to phase out at $518,200 ($113,400 for married filing jointly for whom the exemption began to phase out at $1,036,800.)
  
• For Federal Estate Taxes, the basic exclusion amount is $11,700,000 for decedents dying in 2021.
  
• For Federal Gift Taxes, the annual exclusion amount for gifts remains at $15,000.

Tags: Taxes