Happy New Year!
We hope this year 2021 will see you recovered from last year’s challenges and resume your way to prosperity.
With tax filing just around the corner, now is a great time to organize your thoughts and records to make the filing process easier.
Here are some ideas:
1. Create an April 15 reminder.
It’s the deadline for filing your 2020 individual income tax return, completing gift tax returns, making contributions to a Roth or traditional IRA for 2020, and for paying the first instalment of 2021 individual estimated taxes.
2. Gather your tax information for filing.
Items you’ll need include W-2s, 1099s and other forms you receive from your employers, brokers, banks and others. If you detect any errors, contact the sender immediately to request a corrected copy.
3. Know business return deadlines.
If you own a business or are in a partnership, the deadline for filing partnership and S corporation returns is March 15. Calendar-year C corporation tax returns are due by April 15. Six-month extensions can be requested for partnerships and corporations.
4. Keep donation records.
Here’s what you need to deduct your donations: Cash contributions under $250 require a bank record like a cancelled check, credit card record or a receipt from the charity. For larger donations, a receipt from the charity must be obtained before filing your return. Donations of property should include a photo, a receipt from the charity and a detailed listing of the items donated that are in good or better condition.
5. Review your child’s income.
Your child may be required to file a 2020 income tax return, too. Generally, a 2020 return is required if your child has earned more than $12,200, or has investment income over $1,100, such as dividends, interest, or capital gains. Or has self-employment income more than $400. If your child had both earned and investment income, other thresholds apply.
6. Contribute to your IRA.
There’s still time to make 2020 IRA contributions — up to April 15, or until you’ve contributed the maximum allowed. That’s the lesser of your earned income for 2020 or $6,000 ($7,000 if you’re 50 or older).
7. Make an appointment with your tax preparer.
If you are already our esteemed clients, click to get a head start on tax returns preparation.
Or if you like us to review prior-year tax documents to help you optimize your tax situation.
Please go to our tool section for an individual tax organizer or business tax organizer to help you gather tax information for returns preparation.