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Tax day is approaching. Any tips to prepare so we don't miss anything?
Yes I'm the organized A-type personality. I think this will help everyone here to share a brief tip ahead of tax day. Other than to prepare early and know what changes there are to tax brackets, standard deductions for 2021, what else?
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J
Make contributions into your trad or roth IRA by 4/15 in order to get the deduction for 2020. Caveat here is that you can't open a new IRA and fund it in 2021 to get the 2020 deduction. You need to have opened an IRA prior to 2021 in order to get any deductions for contributions for 2020. Does that make sense? Also deductions on retirement plan contributions are the same as last year. Thanks for making this post!
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I
Pull out a copy of your 2019 return and make a list of things you need on your 2020 tax return so you don't forget. And if you want your refund fast, get your returns in ASAP bc the IRS is still dealing with returns from last year.
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C
If you got unemployment benefits, they count as income and must be reported!
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Right, tax brackets, deductions, credits and exemptions are updated this year taking inflation into account. Check the updated stats here: https://taxfoundation.org/2021-tax-brackets/
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M
If you took money out of a retirement account before retirement age due to the pandemic, you have 3 years to pay that back without penalty.
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2020 was a crazy and disruptive year and the IRS gave people until July to file, so they are 100% still dealing with those returns from last year. So if you want your refund ASAP, get your returns in ASAP!
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