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Don't Mess With Taxes

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July 2020 Tax Season Filing Tips

July is the new April, according to the official 2020 coronavirus tax calendar.

Tax tip pencilJuly. It's finally here. That means Tax Day 2020 is just a couple of weeks away.

If you've been periodically checking the ol' blog's special Coronavirus (COVID-19) and Taxes page, you know there's been a lot of new tax laws enacted to help us cope with the pandemic.

And, of course, the Internal Revenue Service gave us three extra months to file our 2019 Form 1040 and pay any tax we discovered we owe. That new July 15 deadline is almost here.

That means that a lot of tax tips you were used to seeing earlier in the tax season during a pandemic-free year are reappearing here.

There also are some new ones, many of which deal with special COVID-19 tax law changes.

And then there are some post-filing tips, for those industrious filers who got their 1040s to the IRS before the July deadline. Yes, even during a pandemic, some basic year-round tax considerations remain.

Hopefully, this old and new collection of July tax tidbits will help us get through 2020's extended filing season. Like this year's earlier tax tips, they are highlighted in the upper right corner of the ol' blog. After each tip has its time in spotlight, it will join all the other July tips here on this page. 

But before we can pop the bubbly and celebrate the end of the 2020 COVID-19 filing season — or, more likely for most of us who've put off filing this long already, resign ourselves to getting an extension to file by Oct. 15 — we've got to get through the next two weeks.

Since the deadline is getting ever nearer, as noted by the countdown clock also over in the ol' blog's righthand column, let's get to it!

  1. 6 tax tasks to take care of by July 15 — It's July, meaning that Tax Day 2020 is almost here! But you need to take care of more than just filing a Form 1040 (and paying any due tax) this month. Check out these six tax tasks that must be completed in this coronavirus-affected tax season by July 15. (July 1, 2020)
  2. $1.5 billion awaiting late 2016 return filers — If you didn't file a tax year 2016 return in 2017, you've got until July 15, 2020, to do so. Miss that deadline and the U.S. Treasury gets to keep your money. Plus, take a look at the number of 3-year-old unfiled returns and median refund amounts available in your state in this accompanying state-by-state breakout. (July 2, 2020)
  3. IRS adds more pay-taxes-with-cash locations — They don't have Slurpees, but the additional retailers where you now can pay your tax bill in cash should make that option accessible for more people. While the added access is good, the process remains the same. That means if you choose this cash option, get started soon (NOW!) because it takes several steps — and days — to complete. (July 3, 2020)
  4. IRA & HSA contribution deadline is July 15 — The new 2020 Tax Day of July 15 also is the deadline to contribute to a some tax-favored accounts for the 2019 tax year. The Internal Revenue Service has confirmed that change, assuring folks who want to put money for the prior tax year that they, too, have the same automatic 90-day extension as 2019 tax return filers. (July 5, 2020)
  5. July 10 is deadline for some tax notices — Yes, July 15 is 2020's coronavirus-delayed Tax Day, but Internal Revenue Service's pandemic precautions also created a different deadline in connection with some tax agency notices. In some cases, you must respond to those IRS notifications by Friday, July 10. (July 6, 2020)
  6. Tax return filing checklist, take 2 — Coronavirus-delayed Tax Day 2020 is almost here. If you're among the millions who put off this annual tax task until the rapidly approaching July 15, get started now by checking out this tax checklist to make sure you have all the material you need and have taken into account all your personal filing situations to properly complete your Form 1040. Yes, it's long, in part because it includes Schedule A considerations. (July 7, 2020)
  7. Tax statements you need so you can file — Before you start filling out your Form 1040, make sure you have these tax documents. They're sent to you by others who handled matters that involve taxes, like earnings statements or records of taxes you paid. Depending on your filing situation, you'll need at least a few and maybe a lot of them to finish filling in your return. (July 8, 2020)
  8. Deductions that don't require itemizing — Claiming the standard deduction has always been the most popular tax filing option. And with 2017's tax reform law increasing that amount, even more use it rather than itemize. But there still are some added write-off possibilities, formerly known (apologies to Prince) as above-the-line deductions, that every taxpayer can claim. (July 9, 2020)
  9. 10 often overlooked tax breaks — Still searching for tax write-offs as the filing deadline nears? Regardless of whether you claim the standard deduction or itemize, you also need to look at income adjustments. These tax breaks, still referred to (by me, at least!) as above-the-line deductions can reduce the amount of income that's taxed. And don't forget tax credits, which reduce your actual tax bill dollar-for-dollar. Those are among overlooked tax breaks that filers too often miss in their rush to finish their 1040s. (July 10, 2020)
  10. 10 common and costly tax mistakes — Taxes are complicated, so it's no surprise that we taxpayers make mistakes now and then. But some errors seem to show up regularly. You can avoid these 10 common tax filing errors by taking a little extra care when finishing up your Form 1040. (July 11, 2020)
  11. Making two 1040-ES payments at once on July 15 — The chaos of the current COVID-19 tax season has affected, among many other things, estimated tax filings. Instead of being due on April 15 and June 15, the estimated tax payments for quarters 1 and 2 of the 2020 tax year are due simultaneously on July 15. Here's how to handle these dual 1040-ES payments. (July 12, 2020)
  12. 7 ways to pay your tax bill — Tax Day 2020 is almost here. Most of us think it's the day we must file our 1040s. It is. But more importantly, if you owe it's the day you must pay any tax you owe. You can extend the sending Uncle Sam your return, but not your money. Here are 7 ways you can pay up on July 15. (July 13, 2020)
  13. Paying your taxes through an installment plan — Can't pay Uncle Sam the tax bill you owe? Consider setting up a payment plan with the Internal Revenue Service. The federal tax collector has a variety pay-longer-term tax payment arrangement. Most IRS installment plans start by filing a paper or electronic version of Form 9465 and one of the income verification versions of Form 433. (July 14, 2020)
  14. Get more time to file with Form 4868 — Need more time to complete your Form 1040? Then turn to another Internal Revenue Service document, Form 4868. Filing Form 4868 by Tax Day — July 15 this year — will give you three more months — until Oct. 15 — to finish your tax return. Remember, though, you still must pay any tax that you owe (or make plans to do so in installments) with your extension request. (July 15, 2020)

*****

Just getting started on your taxes? Even though time is short, no problem. You can find the previous months' collected tax wisdom by clicking the links below.

January 2020 Filing Season Tax Tips

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

Coronavirus Caveat & More Information
In 2020, we're all dealing with extraordinary circumstances,
both in our daily lives and when it comes to our taxes.
The COVID-19 pandemic and efforts to reduce its transmission
and protect ourselves and our families means that,
for the most part, we're focusing on just getting through these trying days.

But life as we knew it before the coronavirus will return,
along with our mundane tax matters.
Here's hoping that happens soon!
In the meantime, you can find more on the virus and its effects on our taxes
by clicking Coronavirus (COVID-19) and Taxes.

 

*****

Whoa up there, cowboy! Don't leave. Just because we finally reached Tax Day 2020, that doesn't mean we're going anywhere.

It's Weekly Tax Tip Time!

Whoa. Hold on. Brett Eldredge via Giphy

As in previous years, once the annual tax year filing deadline passes, I'll be posting a new piece of tax advice on a weekly basis.

I'm aiming for Friday.  I know, it's the perfect lead-in to weekend tax reading!

And it still will be in the upper right corner of the ol' blog.

Many of the items will be for the majority of taxpayers who are done with their tax year 2019 returns and now are looking for ways to trim this year's tax bill.

A few, though, will be aimed at helping those of us who've yet to file get our annual return to the IRS. These tips will target all the folks who got an extension to file by Oct. 15.

The once-a-week tax tips will continue, as they've done in past years, until calendar year 2020 is a wrap. But don't be surprised if a stray weekly tip or two also shows up in the opening week/weeks of January 2021 before I transition to the New Year and the return of more frequent Filing Season Tax Tips.

*****

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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)

  • Tax Tip; click pencil for all tax tip links

  • 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

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

All About Kay

  • OK, some about Kay
    Open sign
    Kay Bell — Native Texan (the blog title totally makes sense now, right?). Professional journalist. Tax geek.

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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


  • monthly tax moves

  • 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.

    restaurant check tip iStock
    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.

     MLK Day 2020 logo
    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.

    IRS Free File; click image for details

    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

  • 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.

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Mapping Your Tax Route

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

    Taxpayer Advocate Taxpayer Maps 2019

    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.

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  • You can read more
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  • Kay Bell helps you build
    a solid tax foundation in
    "Personal Finance: An Encyclopedia
    of Modern Money Management"




    Kay Bell breaks down taxes and
    estate planning for millennials in
    "Future Millionaires' Guidebook"



    A collection of Kay Bell stories
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    "The Gambler's Guide to Taxes:
    How to Keep More
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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.

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