Ready or not, here comes tax season! So we’re here to help you prepare your 2020 tax return.
Persons Banking Company spoke with CPA Tony Ussery to learn what to consider when preparing your 2020 taxes.
Tony grew up in Forsyth, graduated from Mercer University, and spent 16 years in community banking before making the switch to accounting. He is currently a supervisor at McNair, Mclemore Middlebrooks & Co. in Macon.
Keep reading to learn what to consider before filing your 2020 tax return.
1. Important 2021 Tax Deadlines
Tax Season generally starts in January and ends on April 15 when taxes are officially due.
However, consider adding these important 2021 tax deadlines to your calendar.
Jan. 15, 2021: This is the fourth-quarter estimated tax payment deadline for 2020.
Feb. 1, 2021: Need to catch up on your unpaid 2019 fourth-quarter taxes? Don’t miss this deadline or risk additional penalties.
March 2, 2021: Farmers and fishermen, today is the last day to file individual income tax returns.
April 15, 2021: Today is the deadline for first-quarter estimated tax payments for 2021.
June 15, 2021: This is the deadline for second-quarter estimated tax payments for the 2021 tax year.
June 15, 2021: If you live abroad, today is the deadline to file individual tax returns or Form 4868 for an automatic four-month extension.
Sept. 15, 2021: Today is the deadline for third-quarter estimated tax payments for the 2021 tax year
Oct. 15, 2021: Today is the final extended deadline to file individual tax returns (Form 1040) for the year 2020.
2. Gather 2020 Tax Documents
After you add those dates to your calendar, start gathering important tax documents.
“Most items needed for taxes are mailed to our clients around the end of January,” Tony said. “We mail organizers to our clients around that time to help remind them of the information they need to compile for their return to be completed.”
Some examples of important documents include:
- Charitable donations
- Mortgage interest statements
- Business income and expenses, if applicable.
3. What to Consider Before Filing Your 2020 Taxes
Tony said it’s important to take a look at your overall financial position before filing your 2020 taxes.
“Consider any changes in income or deductions and how it could relate to your tax liability,” he said. “I also suggest you look to see if you have maximized your retirement savings contributions for the year.”
And 2020 through us all a loop with the pandemic, which could even have an impact on our taxes.
Passed in March, the CARES Act (The Coronavirus Aid, Relief, and Economic Security act) provided direct economic assistance for Americans in light of the pandemic.
“Review the impact the CARES Act could have on your taxes, as there are several provisions that could impact you for this tax year,” Tony said.
He said these provisions include charitable contributions; possible IRA distributions with no penalty; deferral of net business losses, and more. “We would recommend that everyone either review the provisions in the Act or consult with a tax professional,” he said.
4. Avoid This Common Mistake
“The biggest mistake we typically see in our preparation of tax returns is clients who do not have support for their income or deductions,” Tony said. “Maintaining that information throughout the year will help when it’s time to file.”
Therefore when in doubt, hire a CPA.
“A CPA can certainly handle taxes for anyone, but at a minimum, we would recommend people that have their own businesses or receive business income from S-corps or partnerships have a CPA,” Tony said.
2020 Taxes: Wrapping Up
- Tax Season generally starts in January and ends on April 15 when taxes are officially due.
- Begin gathering important tax documents in January. These include W2s, charitable donations, mortgage interest statements, and more.
- Look at your overall financial position before filing your 2020 taxes.
- When in doubt, hire a CPA.
- Review the impact the CARES Act could have on your taxes.
Click here to learn more about McNair, McLemore, Middlebrooks, & Co., visit their website at www.mmmcpa.com.
And remember: to learn more about personal and business banking solutions at Persons Banking Company, click here.