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Tax Time Tips

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Tax Time Tips

tax timeNo, it’s not an April Fool’s Day joke. These tax time tips start with good news: the tax filing deadline for 2021 has been extended to May 17, 2021. This is only for individual filers; businesses should have already filed. However, for most of us in the race against the clock to April 15 at midnight, this is welcome news.

According to the Journal of Accountancy,

Taxpayers do not have to file a form, such as Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, to obtain relief under Notice 2021-21. The IRS will disregard the period beginning April 15, 2021, and ending on May 17, 2021, in calculating any interest, penalty, or addition to tax for failure to file the federal income tax returns or to pay the federal income taxes postponed by the notice.

Tax Time Tips for 2021

The time extension should be just an excuse to keep postponing. In fact, this is a great time to organize your tax papers. gather all of the information that you need, and make the most of this extension.

New Tax Tips for 2021

One of the biggest changes for your 2020 taxes is a benefit for people who received unemployment payments. If you were on unemployment in 2020, the American Rescue Plan passed by the Biden Administration has increased the amount of unemployment income you can receive without paying taxes on it: $10,200 for an individual, or $20,400 for a couple filing jointly if you were both on unemployment and your adjusted gross income was less than $150,000. Since so many people spent time on unemployment this past year, this can be a big savings for a lot of people.

Standard Deductions Increase Slightly for 2021

Filing status – Deduction

Single – $12,550

Married, filing jointly $25,100

Married, filing separately – $12,550

Head of household – $18,800

What About Stimulus Checks? Are Those Payments Taxable?

In yet more good news this year from the IRS, the money you received from the federal government in your stimulus checks is not taxable, and it does not have to be reported as income when you do your taxes. Since some people received several thousands of dollars in stimulus payments, this comes as a relief.

Get Qualified Help with Your Taxes this Year

Filing taxes is more complicated than ever. The information we share is based on research and not intended to replace sound financial advice from your accountant or tax preparer. This year it might be wise to hire someone to help you file taxes if you’re at all concerned about getting the best possible outcome.

You may be able to file free, depending on your income – learn more at IRS.gov

 

 

Cris Sgrott

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