SOMERSET, NJ - It’s that time again, the time to face for what seems to be a daunting task, filing your tax returns. While you are enjoying your festivities and celebrating the New Year, get ready to welcome the 2020 Tax Filing Season.
The last thing you want to do is wait until the last minute as this could prove disastrous. Ensure you schedule an appointment with your CPA early in the tax season so that you can avoid the stress of the last-minute rush.
To prepare yourself for the upcoming tax season you can start by getting organized.
1. Implement a record keeping system to properly organize your tax related documents. Organize your receipts in an accordion folder or use a file cabinet for storage.
2. Ensure you have receipts or a statement from medical providers of all your medical, dental, vision, and prescription out of pocket expenses. You can contact all your medical providers to obtain a statement of account that would detail your total out of pocket spend for 2019.
One overlooked deduction is medical mileage. You can deduct the mileage for your trips to doctor appointments. However, your medical expenses and medical mileage can be only be deducted if you itemize and to the extent that it exceeds 10% of your adjusted gross income (AGI).
For example, say you had $6,000 of out of pocket medical expenses. You meet the criteria to itemize and you are single and your AGI is $50,000. Any medical expenses over 10% of AGI or ($50,000 *.10 = $5,000) $5,000 would be deductible. Since you had $6,000 in medical expenses, $1,000 would be deductible ($6,000 - $5,000 = $1,000) If you have a flexible spending account or health savings account, your medical expense deduction may be limited. Consult your CPA on this matter.
3. If you are a business owner, ensure that you are prepared to issue 1099 MISC to anyone you have paid $600 or more during the calendar year. If you have employees, be sure to issue W-2 forms for wages you paid to employees. For audit proof purposes, you may also want to scan your receipts into the computer as the ink may fade over the years. Ensure your bank and credit card accounts are reconciled and all items are properly accounted for in your accounting software. Consult your CPA for help in this matter.
Let Carletta help lessen the stress of your tax season. Call 732-873-0902 today to schedule an appointment.
Some keys dates to keep in mind are as follows:
January 31, 2020 – All W-2 forms and 1099 MISC forms (form that summarizes income for freelance or independent contractor work) must be sent to recipients by this date. If you do not receive your forms within one to two weeks of January 31, 2020, you should contact your employer or company you expect to receive a 1099 MISC from to obtain. All 1099B, 1099 DIV, and 1099 INT forms are sent out around January 31, 2020. These forms detail income, capital gains, and dividends earned on stocks, bonds, commodities, and bank accounts.
March 15, 2020 – Own a S-Corp, C-Corp, partnership, or multi member LLC, this is the deadline to file your business tax returns. Last day to file an automatic 6-month extension. The extension is for filing purposes only. If you owe taxes, you will need to remit payment at this time to avoid a late payment penalty and interest on unpaid taxes.
April 15, 2020 – This is when all individual tax returns are due. This is also the last day to file an automatic 6-month extension. It is important to remember the extension is only for time to file. If you expect to have a tax liability you must pay what you owe at this time to avoid a late payment penalty and interest on unpaid taxes.
September 15, 2020 – Last day to file business tax returns without penalty if you filed an extension on March 15, 2020.
October 15, 2020 – If you are an individual taxpayer and filed an extension on April 15, 2020, this is the final day to submit your tax return.
Working with a professional to help you maximize your deductions and minimize the taxes you pay can be beneficial. The cost of hiring a professional could save you hundreds if not thousands of dollars annually.
Let Carletta help lessen the stress of your tax season. Call 732-873-0902 today to schedule an appointment. To learn more about the services she provides visit www.beckwithcpa.com. You can also email directly at email@example.com.
IRS Circular 230 disclosure: Any tax advice included in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency.
Disclaimer: Nothing in this document should be relied on and you should seek professional advice if you need tax or financial planning information or advice. This publication should not be a substitution for personal tax advice as every tax situation is different. You should obtain personal tax advice from a Certified Public Accountant or other tax professional to address your specific tax needs. You should seek financial planning advice from a financial planning professional or CFP®.
Visit www.beckwithcpa.com for more information.