1) Check Your Withholding
First, make sure that your tax withholding is correct. This can be done easily using the Tax Withholding Estimator from the IRS.
Checking your withholding is important because it helps you avoid unexpected tax bills when you file your 2020 tax return. These are some cases when checking your withholding is particularly important:
- Your refund was smaller than expected when you filed your 2019 taxes this year.
- You owed an unexpected tax bill last year.
- If you got married, bought a house, had a child, or adopted a child.
2) Gather the Documents You Need
Having the right documents on hand makes things a lot easier when you prepare your tax return. These are some of the documents you should start gathering:
- 2019 tax return.
- Form W-2 from your employer.
- Form 1099 from banks and other payers.
- Forms 1095-A if you claim the premium tax credit.
- Notice 1444 that you received with your Economic Impact Payment.
Keep in mind that most income is taxable, including income from the gig economy and virtual currencies, so don’t forget to get any documents related to these types of earnings as well.
3) Confirm Your Email and Mailing Addresses
You want to get all the forms you need on time, so it’s always a good idea to confirm that your employer and banks, as well as any other payers, have your current email and mailing addresses.
4) Renew Your ITIN if It Expired
Some Individual Tax Identification Numbers, or ITINs, expire at the end of 2020. They include:
- All ITINs not used at least once on a federal tax return during the last three years.
- All ITINs issued before 2013 with middle digits 88. (For example, 9XX-88-XXXX).
- ITINs with middle digits 90, 91, 92, 94, 95, 96, 97, 98, or 99 that were assigned before 2013 and have not been used.
If your ITIN expires, then you can submit Form W-7 to the IRS to renew it. Taking this step before filing your return will help you avoid delays in your refund and stay eligible for certain tax credits.
5) You May Be Able to Claim the Recovery Rebate Credit
You may be able to claim the Recovery Rebate Credit if you meet these conditions:
- You didn’t receive an Economic Impact Payment in 2020.
- You are single and your payment was less than $1,200.
- You are married, filed jointly for 2018 or 2019 and your payment was less than $2,400.
- You didn’t receive $500 for each qualifying child.
Learn More About Taxes
These are some previous posts with useful tips to help you navigate with confidence the world of taxes:
- These are your options if you didn’t file your taxes on time
- Do you know what is your tax filing status?
- 4 Tax-related scams to avoid
- Expecting a tax refund? Here’s everything you need to know
- Remember this important thing when you get your Economic Impact Payment
- The 4 most common questions about Economic Impact Payments
Contact the Tax Experts at Delgado’s Insurance
If you are looking for assistance with your 2020 tax return in Bloomington or Riverside, at Delgado’s Insurance our mission is to help you make sense of your options to reduce your liability and maximize your deductions while staying compliant with all relevant laws and regulations.
We have locations in Riverside, California, and Bloomington, California. Contact us today by telephone (951-361-0084, 909-421-9003), email (firstname.lastname@example.org), or through our social media accounts (Facebook, Twitter) to get a free quote and learn more about our wide array of services.