January 2020 Tax Season Filing Tips

Tax reform filing redux. It's got to be better in 2020, right?

Happy New Tax Year 2020! This time 12 months ago we were facing the first federal tax filing season under the first major tax reform changes in more than 30 years.

Most of us came through it OK. Yeah, I know some folks didn't adjust their withholding, at all or enough and ended up facing a tax bill instead of getting their usual expected refund.

But when all was said and done, the Tax Cuts and Jobs Act's (TCJA) lower tax rates and wide income tax brackets meant most of us ended up paying Uncle Sam at least a little less than in prior years.

OK, it might not have been as much tax savings as we wanted, especially compared to some of our richer neighbors. And it definitely wasn't as easy as, or on a postcard-sized form, as many Republican lawmakers had promised.

But it was something.

So we're ready to do the filing thing all over again, this time with less hassle thanks to hindsight and the lessons we learned the last filings season, right?

Maybe.

If you're still a little trepidatious, don't worry. That's what the 2020 version of Tax Season Filings Tips is for. Before you put pencil to tax form — or, more likely, keyboard to software — this collection of pieces of tax advice can help.

Still not necessarily daily: In addition to getting another crack at TCJA provisions, this 2020 filing season also will be familiar in the timing of the Filing Season Tax Tips.

Last year's readers know that in 2019, this blog feature downsized from being a week day occurrence. Personal commitments and challenges forced me to pace myself a bit. It worked, so I'm sticking with not-strictly daily tax tips again in 2020.

But fear not dear readers! I promise you'll still get lots of valuable filing information here on the ol' blog, as featured tax tips and in plain old posts, which will continue to go up every day, even on weekends. Cases in point, see the Saturday and Sunday By the Numbers and Shout Out features.

And those items that are officially designated as Filing Season Tax Tips will be, as in prior years, highlighted at the top of the ol' blog's right column. They'll be there through the April filing deadline, just under the old-school yellow No. 2 pencil tip image.

Also like in previous filing seasons, once a tax tip is posted, it will be will be archived on a monthly tax tip page. Since you're reading this, you know the January 2019 is live. The February, March and April tip collections will go up when those months arrive. You'll find those links at the bottom of this page.

Focus on filing: Another constant in 2020 is that the tax tips through the April deadline primarily will focus of ways to fill out your Form 1040 and yes, this season we still are using that one, although revised yet again, tax return form.

That's 1040 mention also is a great time to note that I'm adding a new occasional feature to the ol' blog in 2020, Tax Form Tuesday. More on this is coming soon, but it's what it sounds like. And some of these forms features will be Filing Season Tax Tips.

While this year's tips will focus mainly on filling out your 2019 tax return, I won't overlook the fact that each filing season also overlaps with necessary tax planning for our 2020 taxes.

This means that some of the tax tips will, as they have for years, also offer information on what we need to do now to reduce our upcoming current year tax bills, which started running on Jan. 1.

OK, enough of the tax tip teasing and housekeeping. I present, tah-dah!, the list of January 2020 Filing Season Tax Tips.

Standard mileage rates drop in 2020 — The good news is that some tax-related driving still is deductible this New Tax Year. The bad news is that in 2020, the standard optional mileage rates for business, medical and certain moving related miles are lower than in 2019. The rates and other details are in part 10 (finally!) of the ol' blog's 2020 tax inflation adjustments series. (Jan. 1, 2020)
IRS announces 2020 tax filing season starting dates — Tax season 2020 has arrived, for business filers at least. The Internal Revenue Service started accepting tax year 2019 business returns on Jan. 7. The tax party really ramps up on Jan. 27, when the agency will begin accepting and processing individual tax returns. (Jan. 7, 2020)
Babies' birthdays determine tax year tax breaks — A baby's birthday affects when you can claim any of the many child-related tax breaks. And when it's twins, child birth, rearing and tax benefits can get a bit more complicated, especially if delivery spans both New Year's Eve and Day. (Jan. 8, 2020)
Tax return filing checklist — Filling out your 1040 actually is the easiest part of tax return filing. Before you get to that step, you need to prepare, by making sure you have all the tax statements and other documents you need. And if you itemize, that means even more pre-filing data collection. Here's a checklist (yes, a loooong checklist) of what you need to consider and collect before filing. (Jan. 9, 2020)
6 reasons to file your taxes early — Taxpayers expecting refunds typically are among the firs to file their 1040s each year. But there are other reasons to file your taxes early. (Jan. 10, 2020)
Jan. 15 is 4th quarter estimated tax deadline — Estimated tax payers face the final tax year 2019 deadline next week. The 4th installment is due on Jan. 15. If you miss it or have paid too little for the prior tax year, you could face tax penalties. (Jan. 12, 2020)
Form 1040 revised again — The new tax reform law meant that taxpayers last filing season saw the first substantive changes to Form 1040 in decades. But the revisions haven't stopped. With tax-filing season 2020 upon us, the IRS has again tweaked the lone individual tax return and eliminated 3 of its original schedules. (Jan. 14, 2020)
Finding and checking out your tax preparer — If you're looking for a tax preparer, you need to make sure you find one that fits your filing needs. Then you need to thoroughly check out that person to make sure he or she is a reputable and qualified tax professional. (Jan. 16, 2020)
Who must file a tax return — Most of us who make any money generally must file a tax return. Here are the details on the three filing requirements — age, income and filing status — that will determine whether you're one of the millions from whom the Internal Revenue Service demands a Form 1040. (Jan. 17, 2020)
Who should file a tax return — If you're lucky enough not to have to file a tax return, congrats! But sometimes you should file even if you're not legally required to do so. Here are 10 such reasons to send the Internal Revenue Service a Form 1040. (Jan. 20, 2020)
Decoding your W-2 — You must have your W-2 to file your tax return. But that relatively small tax statement has a whole lot of information on it beyond how much you earned and the amount of taxes you paid via withholding. This overview looks at what to look for on your W-2 and how to use the information. (Jan. 22, 2020)
Do your taxes for free at Free File — Free. It's the best four-letter word out there, especially when it comes to your taxes. The Internal Revenue Service/tax software industry's no-cost tax prep and e-filing option Free File is open, ahead of the tax agency's official Jan. 27 start of the 2020 tax season. Here are your options, eligibility info and tips on making the most of it. (Jan. 23, 2020)
6 reasons to wait to file — The 2020 tax filing season officially starts next week, but here are six reasons why you might not want to be among the first filers to send in your 1040 to the Internal Revenue Service. (Jan. 24, 2020)
States also offer free online tax filing — The federal Free File option is available as tax season 2020 starts on Jan. 27. But many of the 43 states that collect tax from their residents also have their own no-cost online state tax preparation and e-filing programs. (Jan. 26, 2020)
Tax statements needed to file returns — The opening of every filing season there is a rush by millions of taxpayers to submit their returns. Many taxpayers, however, can't yet file 1040 forms. They're still waiting for one or more of these tax statements. (Jan. 27, 2020)
Deductions that don't require itemizing — Most taxpayers don't itemize, especially with the new tax law's larger standard deductions, but they still can claim some write-offs directly on Form 1040 Schedule 1. These possibilities, formerly known (apologies to Prince) as above-the-line deductions, include the recently resurrected tuition and fees claim. (Jan. 29, 2020)
Claim the EITC if you qualify — The Earned Income Tax Credit (EITC) offers savings, and possible tax refunds, to low- and moderate-income workers. But every year, millions who are eligible to claim the EITC don't. Check out this tax credit's benefits (including a possible refund!) and if you qualify, claim it. (Jan. 31, 2020)

As I mentioned earlier on this 2020 inaugural Filing Season Tax Tips page, as soon as January wraps (and all this month's tips fill up this page), you can check out February's (and March's and April's) Filing Season Tax Tips.

If you're curious, those tax tip pages already are live, but for now with a fun GIF instead of tips. Tax info will replace that animated fellow when those months arrive.

February 2020 Filing Season Tax Tips

March 2020 Filing Season Tax Tips

April 2020 Filing Season Tax Tips

May 2020 Filing Season Tax Tips

June 2020 Filing Season Tax Tips

July 2020 Filing Season Tax Tips

Advertisements

Weekly Tax Tip

Reporting your winnings to the IRS — Uncle Sam apparently is Lady Luck's cousin. Your lottery jackpot, other gambling winnings and prizes, too, are taxable income. Here's how to report them to the Internal Revenue Service on Form 1040's Schedule 1. (Jan. 11, 2021)
Check out all the latest post-Tax Day tax advice in the 2020 edition of Weekly Tax Tips. Many of these once-a-week tips will focus on planning moves to cut your 2020 tax bill.
If, however, you got an extension and are still working on your 2019 return, you can get a refresher of the 2020 Filing Season Tax Tips at their respective monthly pages:
January, February, March, April, May, June and July.

COVID-19 & Taxes

Coronavirus has wreaked havoc
on the 2020 tax season.
This Coronavirus (COVID-19) & Taxes page has details.

All About Kay

OK, some about Kay

Kay Bell — Native Texan (the blog title totally makes sense now, right?). Professional journalist. Tax geek.

My Other Accounts

Tick ... Tick ... Tick

Tax Season 2021 is here!
Happy New Tax Year! Are you ready to file your 2020 tax return? Me neither. With all the delays last year due to COVID-19, it seems like that prior tax season just finished. But time and taxes wait for no taxpayer. The Internal Revenue Service, which started 2021 by delivering more coronavirus economic relief payments, says it will be ready for our returns. So let's get prepared, too. The monthly tips and reminders a little further down this column should help us focus on our taxes and make the filing of them by go more smoothly. Also keep an eye on the countdown clock just below. It will help us keep track of how much time we have until Tax Day on April 15, just in case some of us want to put things off until the final hours. .
Note: I'm in the Central Time Zone, so adjust accordingly for where you live.

Time for Tax Tasks

Oh, 2021. I cannot tell you how happy we are to see you. You will be better than 2020, right? Right?!?

via GIPHY

And just so there's no confusion, that's a question New Year 2021, not a challenge. So don't you dare try to outdo the just-past Year of COVID-19 and its many, many complications, including in the tax world.

Jan. 1: While there's some good news with vaccines going out to fight the coronavirus pandemic, we'll still be dealing with it for a while. The Internal Revenue Service is delivering the second round of relief payments and the commissioner promises that the agency will start the 2021 filing season as usual later this month. I hope that's correct, but we shall see.

Jan. 4: If your job made it through the tough last year, good for you and your company and welcome to the New Year's first work week. It's the perfect time to refine your payroll withholding. This is particularly applicable true for federal employees, including members of the military and even IRS personnel, whose withholding was suspended that last few months of 2020. That money must be paid to Uncle Sam, but a new late-year law says the repayment isn't due until the end of 2021. Adjustment withholding now will give you 52 weeks to spread it across, making the per-paycheck bite less painful.

Jan. 7: The IRS' online withholding assistant or your tax pro can help you with your withholding amount and other tax numbers, but it's also a good idea going into a New Year to have an idea of your tax bracket and income tax rate. The rates tend to hold steady (until Congress starts fiddling!), but the brackets are adjusted annually for inflation. You can check out the 2021 income brackets (and 2020's for comparison) in the first post in the ol' blog's annual inflation series. At the end of that item, you'll find a directly to the other nine inflation items.

Jan. 11: Continuing coronavirus precautions mean some restaurants are still closed for in-house dining. Other eateries are managing with take-out meals and deliveries. Whether you're able to enjoy table service in or getting food brought to your house, remember to tip your server or delivery person.

If a tip isn't included in your food delivery charge, click the image above to calculate how much to tip the person who brought it to you.

As for servers who are still on the job, remember that your tips are taxable income. If you at least $20 in job-related gratuities last December, you need to account for them today by using Form 4070 to report your tips today to your employer.

Jan. 13: Did some of those tips come from a side hustle? That's just one of the tax matters to think about when you are part of the gig economy. In these freelance or contractor situations, you'll need to pay estimated taxes.

Jan. 15: The final estimated tax payment for the prior year, 2020 in this case, is due today. The other three payments are for earnings in 2021 that aren't subject to withholding and are due on April 15, June 15 and Sept. 15. And be sure to account for your self-employment tax in figuring your estimated amounts.

Jan. 18: Many people spend Martin Luther King Jr. Day each year as a day of service.

Click image to find out ways
you can volunteer on MLK Day.
Taking time on Dr. King's holiday to volunteer at a charity isn't tax deductible, but some costs associated with volunteering could help reduce your tax bill if you itemize. Most filers, however, claim the standard deduction and a new tax law gives them a tax break, too. On your 2020 return, you can claim up to $300 in donations directly on your Form 1040. In 2021, the $300 amount remains, but is doubled for couples who file jointly.

Jan. 21: If the IRS meets its usual timetable, the annual tax-filing season will start soon. If you can get your tax material together, then there are several good reasons to file your return early.

Jan. 25: Millions of filers find electronic tax options are great ways to get returns to the IRS as soon as possible. The tax agency agrees. In fact, for almost two decades, the IRS has partnered with the Free File Alliance to offer eligible taxpayers access to online tax software and e-filing through the aptly named Free File site at IRS.gov.

Last year, Free File was available to filers with adjusted gross income of $69,000 or less, regardless of filing status. That threshold has been bumped up to $72,000 for this filing season. If you're eligible, be ready to log-on when Free File officially opens, which usually around this time.

Jan. 29: Of course, regardless of how you file your taxes, you can't do so until you all the necessary documents, such as W-2 and 1099 forms. Employers have until the end of the month (or Feb. 1 this year since Jan. 31 falls on Sunday) to get the to you, so be on the lookout for all the documents you need to file.

Small Business Tax Calendar: Important filing, deposit and record keeping dates throughout the year that your company needs to know. You can get more tax calendar information at the IRS' online calendar page and view the full year's important business and individual tax dates in IRS Pub. 509.

State Tax Help

Don't forget your state taxes!
Forty-three states and D.C. collect personal income taxes. But even if you live in of the seven states without an income levy, you still face other state (and local) taxes.

State Tax Departments provides links to your state's Web page. The companion page, Tax Tidbits, is the compilation of blurbs about each state's tax laws. And for more state tax news, check out all our state tax bloggings.

Tax Forms

Thanks to our increased use of tax preparers and computer software, many of us don't see our tax forms until we sign and file them. But knowing what's on these documents, either in paper or digital form, and why the IRS wants it is key to understanding our tax system. And knowledge definitely is power, especially when it comes to tax savings. Find this valuable information in the ol' blog's special Tax Forms Fiesta! page.

What are you looking for?

Looking for something in particular? Start with the Table of Contents.
Or check out the Archives, where you can review posts by month and category. Or enter specific keywords in the box below to search
Don't Mess With Taxes.

Search

Subscribe:
E-mail, RSS or both!

Enter your Email

Powered by FeedBlitz
RSS

Mapping Your Tax Route

Do you get lost doing your taxes? Check out the Taxpayer Advocate Service's Taxpayer Roadmap.

This publication, designed along the lines of a subway map, shows the many routes and detours of a taxpayer's journey through our elaborate Internal Revenue Code and the Internal Revenue Service's enforcement of our tax collection system.

0, 1, 2, 3, 4, 5, 6, 7, 8, 9 ...

Taxes are all about the numbers.
Check out these (mostly) weekly
By the Numbers figures.

Kudos Et Cetera

National Association
for Women in Communications
Winner, Best Personal Blog
2012, 2014 & 2017
Plutus Financial Bloggers Awards
Celebrating the Best
in Personal Finance
Winner, Best Tax Blog
2011 and 2013
Lifetime Achievement Nominee 2020

I gotta tell ya ...

AKA Disclaimer:
I am a professional journalist who has been covering tax issues since 1999.
I am not a professional tax preparer.
The content on Don't Mess With Taxes is my personal opinion based on my study and understanding of tax laws, policies and regulations. It is provided for your private, noncommercial, educational and informational purposes only. It is not a recommendation of any specific tax action(s) you should or should not take. Similarly, mentions of products or services are not endorsements. In other words, my ramblings on the ol' blog are free advice and you know what they say about getting what you pay for. That's why when it comes to filing your taxes, I urge you to get additional, professional, paid-for guidance from an accountant, Enrolled Agent or other qualified tax preparer who is familiar with your individual tax circumstances.

©©©©© & ®®®®®

Don't Mess With Taxes®
is a registered trademark
of S. Kay Bell.

All content on this site is
© 2005-2021 S. Kay Bell
dba Write Here, a division of
SKB Editorial Services, LLC
And a bit of housekeeping.
Note 1: Some of the links on this site
are affiliate links. That means that
if you click through from
a Don't Mess With Taxes link
and then buy the product,
I receive a commission.

Note 2: Links to outside content
might become inactive due to changes
at the copy's originating website.
If you discover dead links, please e-mail me the details. Thanks.

Note 3: The banner art for the ol' blog
is courtesy Pictures of Money
via Flickr Creative Commons.

Privacy Policy

Wondering what happens to your information once you subscribe? Don't worry. Don't Mess With Taxes respects your wish not to be a mere data source. Check the ol' blog's privacy policy at the Table of Contents page, as well as on the separate Privacy Policy page.

Blog powered by Typepad
Member since 11/2005

January 2021

..................................................

.................................................................

Sun	Mon	Tue	Wed	Thu	Fri	Sat
					1	2
3	4	5	6	7	8	9
10	11	12	13	14	15	16
17	18	19	20	21	22	23
24	25	26	27	28	29	30
31