Yes, 2020 is in full swing and tax season is upon us. There are some additional revisions to 2020 tax returns that are worth talking about. Here are 3 tips to ensure you're on the right track!
TIP #1: The IRS is asking for more information than ever on your tax returns. There is a new question on Schedule 1:
"At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?"
Whatever you do, be sure you account for ALL of your income on your 2020 tax return--foreign, domestic and virtual currency like Bitcoin, etc.
The IRS is also requesting your phone number and email address on Form 1040
Tip #2: You do not have to include this information, so be sure to determine whether or not you want to. At Emerald Financial Partners, we will not be including this personal information on your tax return, for our clients, unless you specifically request us to.
Doublecheck your last 2019 paystub and compare it to 2020.
Tip #3: On another topic, we have noticed many people are having less tax withheld from their paychecks in accordance with the new 2020 withholding tables. Please take a close look at your last 2019 paystub and compare it to your new 2020 paystub and make sure there is not more than a $20 difference in your withholding. If there is, you (and your spouse) should fill out new W-4's and provide them to your employer.
For 2020 tax returns, the IRS began accepting E-Filed returns on January 27th. IRS will delay processing (by 2-3 weeks) for the tax returns that have the Earned Income Tax Credit or Child Tax Credit.
If you own a business, have real estate investments, or are thinking about starting a business, we specialize in helping small to medium sized businesses with tax planning and accounting strategies. We are your proactive accountants, which means we help you anticipate and plan for tax changes and strategies so there will be fewer surprises at tax time! Don't let another year go by without proactively planning for your personal and business needs. Contact Emerald Financial Partners today!
Bonus Tip: If you are a small business owner, have you considered setting up a SEP-IRA? One of the most important things you can do for your business is to pay yourself first! Ask us how!