Well, it’s officially December. That means 2020 is almost over, right?
It may indeed mean that, but it also means that it is time to start thinking about filing taxes. (I know, right, didn’t we just do this?) And there are a few things special to this year that one should keep in mind.
First, I have mentioned it in the past, but I would again like to note that even if you do not itemize deductions, there is a $300 charitable donation deduction available to everyone this year. So if you have the means to give, let the tax bonus be a little extra push to help someone else.
As always, keep an eye on your mailboxes as the calendar turns. Forms will start arriving and even if you are not ready to file immediately, keeping all those things together in the same place will save some time when you are ready. Beyond that, there are probably some things that you know you’re going to need that may not come in the mail and/or that you already have (receipts, bank statements, etc.), so why not throw them in a folder and get things started.
Before any of those forms arrive, too, keep in mind that any money you make is most likely taxable. So be sure to have records of all that, no matter in what form it came. For too many this year, that means remembering that unemployment income is taxable.
This also includes money earned in freelance gigs. Those who worked a lot in this area have become accustomed to receiving a Form 1099 reporting that money but remember that this has changed this year and you should instead be watching for a Form 1099-NEC this year. (Although there are still other reasons you may get a 1099, so do not just toss it in the garbage if you get one.)
Also new for this year, keep a hold on that Notice 1444 that you may have received along with any Economic Impact Payment this year. Of course, that came months ago and you may not have the notice anymore. If this is the case, at least be sure to note down how much you did receive so we have the numbers to work with.
For even that simple act is one of the things that can save some time and headache in a couple months. Most of the individual actions you need to do to get ready to file your taxes do not take much time, when you let them all build up and try to do it all in one morning, though, then it feels very heavy. A little prep work helps with that and couldn’t we all do with having things feel a little lighter right now?
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