Get Ready to File 2020 Taxes

What To Do Before Tax Year 2020 Ends

There are things you can do before the end of 2020 to help you get ready for the 2021 tax filing season. Below are a few of them.

Donate to Charity

There is still time to make a 2020 donation. If you don’t itemize deductions, you may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying charities. Cash donations include those made by check, credit card, or debit card. Before making a donation, check the Tax Exempt Organization Search tool on IRS.gov to make sure the organization is eligible for tax-deductible donations.

The Coronavirus Aid, Relief, and Economic Security Act changed this law. The CARES Act also temporarily suspends limits on charitable contributions and temporarily increases limits on contributions of food inventory.

Report Any Name or Address Change

If you moved in 2020, notify the IRS of your new address. You should also notify the Social Security Administration of any name change.

Renew Expiring ITINs

Certain Individual Taxpayer Identification Numbers expire at the end of this year. You can visit the ITIN page on IRS.gov for more information on which numbers need renewal.

Connect With the IRS

You can find information on things like tax changes, scam alerts, initiatives, tax products, and taxpayer services on social media. These social media tools are available in different languages, including English, Spanish, and American Sign Language. However, make sure the source of the information is from the IRS or your trusted tax professional.

Find Information About Retirement Plans

The CARES Act retirement plan relief waived required minimum distributions during 2020 for IRA or retirement plan accounts. Also, eligible individuals can take a coronavirus-related distribution of up to $100,000 by December 30, 2020, and repay it over three years or pay the tax due over three years. You can find end-of-year tax information about retirement plans on IRS.gov or talk to your tax professional.

Contribute Salary Deferral

You can make a salary deferral to a retirement plan. This helps maximize the tax credit available for eligible contributions. You should make sure your total salary deferral contributions do not exceed the $19,500 limit for 2020.

Think About Tax Refunds

You should be careful not to expect getting a refund by a certain date. This is especially true if you plan to use your refund to make major purchases or pay bills. Just as each tax return is unique to the individual, so is each taxpayer’s refund. But, you can take steps now to get ready to file your federal tax return in 2021.

A Final Note

For these and other end-of-year tax planning strategies, contact your local tax professional.

Stay safe. Stay well. Stay home.