What’s Next After The Prolonged 2020 Tax Season?

What’s Next After The Prolonged 2020 Tax Season?

The 2020 tax season ended on July 15. However, the tax year is in full effect. Most taxpayers account for their self-assessment tax obligation within a calendar year (e.g., January – December). Below are a few suggestions (limited scope) on how to prepare for the upcoming tax season:

Compile your tax information for the 2021 tax season. Each line item on your Form 1040, U.S. Individual Income Tax Return and state income tax return should be supported with evidence. To-date, you may have received documentation that applies to your 2020 income tax returns such as medical bills, social services statement, Notice 1444, Your Economic Impact Payment, etc. One method you can implement within your self-assessment tax responsibility is COPE your tax records. That is, collect, organize, preserve and evaluate your tax information. Start this process today!

Perform a checkup on your tax plan. Most taxpayers do not like surprises doing tax time (or ever). One road map to tax efficiency is researching tax benefits that you qualify for and making the proper steps of tax compliance. Keep in mind that a tax plan does need regular maintenance.

Adjust your withholding and/or estimated tax payments. Analyze your life events to-date that may affect your tax situation. The Internal Revenue Service (IRS) has for a long time advocated paying only the tax you owe. Regular monitoring of your withholding and/or estimated tax payments will more likely than not assist you with the above goal. Decide now on your tools of success such the IRS’s Withholding Calculator, Publication 505, Tax Withholding and Estimated Tax and/or a tax professional such as a Certified Public Accountant.

For taxpayers who submitted Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, the deadline to file their income tax returns is Thursday, October 15, 2020. As you wrap-up the 2020 tax year and prepare for the 2021 tax season, keep in mind that the United States Department of the Treasury and the IRS expects taxpayers to follow tax guidance that has substantial authority such as the U.S. Internal Revenue Code. Feel free to contact Pierce, CPA & Advisors to discuss tax solutions such as tax planning today. Best wishes!

Pierce, CPA & Advisors’ website, social media posts including blogs are meant to be used as informational guides and shall not be construed as providing any health, legal or accounting advice. A best practice is to consult with professionals such as government officials, healthcare experts, Certified Public Accountants, attorneys, etc. about your situation.

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