For many people in the United States, tax season 2021 will be a complicated one. In the middle of a global pandemic, shut-downs, restrictions, lay-offs, and remote job transfers caused major changes in taxable income. A lot of people have questions about deductions, tax strategies, and how to account for losses as business owners and more in a year in which we had stimulus checks and unemployment checks as part of our income.
If you haven’t started your taxes yet, there are some items you might want to consider gathering before attempting to find your next tax deduction or digging for receipts for your charitable contribution. To find out what you’ll need to get your 2020 taxes filed with ease this year, read on.
Organization will be key in 2021 when it comes time to do your taxes. Consider buying office supplies that you can write off next year, like custom presentation folders, a filing system, a calculator, and a computer printer if you plan to self-prepare. Something as simple as a custom pocket folder could be a great way to organize 1099-MISC forms, traditional IRA paperwork, and taxpayer receipts.
For most people who self prepare, the best tax strategy is to take it one section at a time, and having a good hard copy organizational system will make this easier.
An Internet Connection
In 2020, many people turned to the internet for work from home and online learning. Odds are that you already have a stable internet connection. If you don’t, getting one will help tremendously with questions bound to come up about your tax strategies. Whether you use it to file electronically or to find out answers to questions about deductions and if a stimulus check counts toward gross income, the internet will be an invaluable tool when you begin to file your taxes this year.
A Tax Professional or Tax Software
If you’ve used tax preparation programs in the past, you might be a little nervous about doing the same this year, simply because things are a little more complicated. Rest assured, these programs will ask you about situations like stimulus checks and any money you received from the Cares Act in the United States and will do the accounting for you. They’ll also ask if the IRS owes you a stimulus check and make a great effort to help you through your child tax credit and tax burden sections.
For those who aren’t comfortable using software programs and would rather see a tax professional in-person to handle their taxes, it’s a good idea to come up with that tax plan well in advance of the April 15 deadline. The global pandemic and distancing restrictions could mean slower turnaround times when it comes to the preparation and processing of your taxes this year.
Current events, the pandemic, and changes of circumstance have many people stressed out about this year’s taxes. Call times are longer, mail could be delayed, and many have had trouble accessing the paperwork they need to file their taxes. It’s a good idea to remind yourself that we’re in this together and do what you can to have patience with the tax process.
Whether you do a little at a time or take time out for meditation, relaxation, or a glass of wine, taking it slow and being patient will help you tackle your 2020 taxes. At the end of the day, most people don’t enjoy filing taxes and some will procrastinate until the deadline is near. For the sake of your sanity, start earlier than you might normally. Bringing your patience and determination to the table will help you through a complicated tax season, and you might be surprised to find that it goes more easily than you anticipate.