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May 2020 Tax Season Filing Tips

2020: When May became the new tax season's February.

Tax tip pencilNormally, this tax tip page would be full of post-filing advice. But, as we all know all too well by now, the coronavirus pandemic has made 2020 an incredibly abnormal tax season.

April 15 came and went without a frenzy of individual tax return filings. Those 1040s and lots of other tax tasks that the Internal Revenue Service previously has demanded be done by mid-April are now delayed until July 15. 

That effectively means that with ten weeks until Tax Day 2020, May is the new February. And that means that many of us are really just now getting into gear when it comes to filing our taxes.

Tax time vs. more freedom: This unusual situation where May is part of the active tax season also coincides with some COVID-19 changes.

Some states that had enforced stay-home orders to help slow the spread of the pandemic now are letting up on the lock-down.  That means, we hope, things will start returning to normal, or at least a new normal outside our houses.

That's good, as long as we follow Dr. Anthony Fauci's recommendations are are still cautious and diligent about social distancing!

But it also that means more chances for us to get distracted. If we're not careful, July 15, like the April 15 it's temporarily replaced, will suddenly be bearing down on us.

Taxes 2019 and 2020: So this May, we still need to make some tax moves so that we'll be ready when the filing due date arrives. Or before. As with the regular deadline, the IRS will gladly take your Form 1040 earlier.

We also need to be thinking about what the changes in our lives and jobs mean for our 2020 taxes. This month some of the tips will focus on those moves.

Either way, taxes are still here so here are the ol' blog's first ever May of filing season, not post-filing season, tips.

As with its predecessors, these May pieces of  tax advice are highlighted in the upper right corner of the ol' blog. And as is routine, after each tip's time in spotlight, it will join all the May tips here on this page.

Let's get to them!

  1. 5 COVID relief payment myths — There's no need for a mayday alert, on May Day or any other day, as long as you don't fall for these 5 coronavirus stimulus myths. (May 1, 2020)
  2. May the Tax Fourth Be With You: COVID-19 sequel — In a galaxy very close to home, taxes are always critical. This year, coronavirus considerations offer some different takes on the annual Star Wars' inspired May the Tax Fourth Be With You sequel. (May 4, 2020)
  3. Charitable tax guidelines, COVID-19 changes — The tax rules for donating, along with myriad (and out-of-the-ordinary) ways to give provide philanthropic and tax-saving options for donors beyond May 5's special #GivingTuesdayNow. (May 5, 2020)
  4. May 13 is COVID-19 relief direct deposit deadline — If you want your COVID-19 economic relief payment directly deposited in your bank account act now. Or at least by May 13. That's the deadline to use the Internal Revenue Service's online Get My Payment tool to provide your financial institution info so your coronavirus cash goes there instead of coming to you as a mailed Treasury check. (May 9, 2020)
  5. 6 reasons your COVID-19 payment was short — You got your COVID-19 economic impact payment (EIP). Yay! But it was less than you expected. Boo! Here are some reasons why that might have happened and how you might get the rest … but not until next year. (May 11, 2020)
  6. FSA, other benefit changes under COVID-19 — COVID-19's disruptions continue, this time affecting people's tax-favored workplace-provided benefits. To help ease those problems, the IRS has issued a couple of notices that allow changes to things like medical spending accounts and dependent care assistance programs. The goal is to give employees more flexibility to adjust benefits in this uncertain time. (May 12, 2020)
  7. Homeowner's insurance is tax deductible in some situations — Owning a home is costly. But one of those expenses, your property's hazard insurance, might be at least partially tax deductible. That's the case if you're self-employed and work from home. (May 14, 2020)
  8. Hurricane prep time is here — The 2020 Atlantic hurricane season is off to an early start, just like happened last year. Fortunately, Tropical Storm Arthur didn't cause many problems to U.S. coastal residents. But the early storm is a good reminder that we need to prepare now. Here are some disaster kit tips, as well as financial and tax issues to consider, along with this year's storm names. (May 17, 2020)
  9. File beyond 7/15 with IRS' OK — Tax Day 2020 is three months later than usual thanks to COVID-19 complications. Still, some folks will find they need more time as July 15 nears. No worries. You can still use Internal Revenue Service Form 4868 to get an extension until Oct. 15. (May 19, 2020)
  10. Tax-free COVID payments in most states — Across most of the United States, the federal COVID-19 economic relief payments aren't taxable at any level. However, a handful of states' tax laws mean their residents could see these stimulus amounts taxed at the state level. Some of those states now are taking action to ensure that doesn't happen. (May 20, 2020)
  11. Inflation increase for high deductible medical savings plans — Looking for medical insurance with lower premiums? A high deductible health plan (HDHP) could be just the thing, especially when you add a health savings account (HSA). Here are the IRS' annual 2021 adjustments to this tax-favored medical option. And don't forget you also still have time to up your 2019 contributions. (May 21, 2020)
  12. Some COVID-19 payments are on debit cards — Don't have a bank account? No worries, says the Treasury Department. It's sending out a star-spangled debit card with your qualifying COVID-19 economic relief payment amount loaded on it. So look for the unmarked envelope from MetaBank in your snail mail box and don't throw away the card! (May 22, 2020)
  13. Expat tax break could increase COVID-19 payments — Living in Paris and getting a larger COVID-19 relief payment than you would have if you worked in the United States? That's the deal for some expats, and not just those in The City of Light, thanks to a special foreign income tax exemption. (May 23, 2020)
  14. HSAs mean tax savings & more filing tasks — High deductible health plans (HDHP) and associated health savings accounts (HSA) can help you save medical tax dollars. The health care choice, however, requires another tax task. You'll have to file Form 8889. (May 26, 2020)
  15. Form 1040-X going digital this summer — Good news for taxpayers who want to amend a tax filing mistake: the IRS will accept some 1040-X e-filings later this summer. It's only for 2019 tax corrections, but it's a start. (May 28, 2020)

*****

Just getting started on your taxes? No problem. You can find the previous months' collected tax wisdom by clicking the links below.

And yes, you can click on May, June and June, too, but you'll just find a guy telling you to whoa up. We're not there yet. Rest assured, those tips will be added as those months arrive.

January 2020 Filing Season Tax Tips

February 2020 Filing Season Tax Tips

March 2020 Filing Season Tax Tips

April 2020 Filing Season Tax Tips

June 2020 Filing Season Tax Tips

July 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.

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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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  • 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
    is included in
    "The Gambler's Guide to Taxes:
    How to Keep More
    of What You Win"




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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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