The IRS is making a series of reminders to help taxpayers get ready for the upcoming tax filing season. Through a special page, available on the agency’s website they are recommending steps that should be taken in the last weeks of 2020. What are they?
Not having your tax return in order is a major worry when tax season arrives every year. Getting started early and following these tips will make it all a less stressful experience.
Put in order your tax records
Having your records organized will make preparing a tax return easier, and it can also help you discover potentially overlooked deductions or credits.
Include in your tax records:
• Forms W-2 from employers
• Forms 1099 from banks and other payers
• Other income documents and records of virtual currency transactions.
• Your Notice 1444 Your Economic Tax Payment with your tax records if you received an Economic Impact Payment.
View your account information and notify the IRS if your address changes and notify the Social Security Administration of a legal name change.
Most income is taxable, including:
• Unemployment income,
• Refund interest,
• Income from the gig economy
• Virtual currencies
Check your Individual Tax Identification Number (ITIN)
Ensure your Individual Tax Identification Number (ITIN) hasn’t expired before you file a tax return in 2021
Check you've withheld enough tax
1) Use the Tax Withholding Estimator tool in IRS.gov to help you determine the right amount of tax to have withheld from your paycheck.
2) Consider estimated tax payments. If you receive a substantial amount of non-wage income you should make quarterly estimated tax payments, with the last payment for 2020 due on Jan. 15, 2021. Payment options can be found at IRS.gov/payments.
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