As we get closer to the end of Spring and start May of with such great weather here in Fort Collins, the extended personal tax filing deadlines is almost at hand. If you are scrabbling to get your tax return together, we can still be a service. You have less than 2 weeks left to file because May 17th, 2021 is the absolute last day to submit your personal taxes without an extension or without incurring a late fee. Waiving late fees, especially in the event of multiple or a repeat offender, can be difficult and with the IRS being swamped this year, you will likely not receive any response letters from them quickly. Consider this blog article a sign! You can either file yourself or save money by filing with experts like Geyer and Associates out of Fort Collins. There may be a large amount of money coming back to you if you take advantage of the experience of a great CPA. Here are the things you will need before you give us a call or start the process on your own!
Gather Important Documents: With 2020 being such a tumultuous year, many of us received unemployment. That income is taxable and therefore having the related forms handy will save a lot of time. This form is known as a 1099-G and will show everything paid out from unemployment. You should also gather mortgage forms if you paid for one during 2020, this form is the 1098. If you operate a business by yourself or are self-employed, keeping receipts from business expenses is key to saving money when a return is filed. Those filing your taxes will also need to know if you received your stimulus checks for 2020. Finally, your total income is very important. Whatever tax documents are given toy our by your employer are very important for completing the tax return.
Did you give to charity or donate? Most people fall into the standard deduction group, which normally cannot write off money for charity, however 2020 is the exception. This year, you can deduct up to $300 in cash donations so keep your paperwork and receipts saved, because every little bit of credit counts towards a tax return.
Retirement Considerations: Keep in mind, up to $6,000 can be contributed to an individual retirement account until the filing deadline for 2020. With traditional IRAs, contributions are fully tax-deductible which allows for a full proof way to cut down a tax bill. If your retirement plan is in place, ensure you are under the income limits of $75,000 for single filers, $124,000 for married couples to qualify for a deduction.
Stimulus Checks: In our previous blogs, we mentioned stimulus checks number one and two for $1,200 and $600 respectively. These checks paid by the government are not taxed, however if you failed to receive one, you may be entitled to a tax credit. This is known as a recovery rebate credit and could amount to huge savings. Additionally, if based on your 2019 income, you received a check but for more than you qualified for, you do not need to send it back to the government nor will you face a penalty. Keep these in mind as you file your taxes.
Plan Withdrawal: The relief package last year allowed those affected by the virus to withdraw up to $100,000 from their retirement accounts throughout 2020 without facing the penalty for withdrawing before 60. Unfortunately, these withdrawals are taxable and if you were one of those that took advantage of the withdrawal option, you will have to pay taxes unless you pay the money back. There are options to pay the taxes accrued by this withdrawal with a 3 year payment plan.
These are just a few things to keep in mind as we go into these last few weeks before the deadline. Please file as soon as you can or contact us directly so we can get it going quickly or at least file a personal tax return extension. There is a still a window to get all of your paperwork together and file a 2020 tax return. Don't delay and remember, it's always better to file with an expert like Geyer and Associates CPAs to save the maximum amount of money you can.