It’s that time of year again. TAX SEASON.
Loeffler Financial Group is celebrating their 20th Tax Season this year! That’s right 20 years! What first started out in Craig Loeffler’s living room, has now become a successful full service accounting, wealth management and tax preparation!
TAX PREPARER.
Many individuals and small businesses question if they should do their own taxes or seek a tax accountant. You can certainly do your own taxes, however, 2020 brought a lot of change, and experts said a preparer is the way to go.
If someone, for example, got laid off, and they went and started their own business, there are deductions they may not be aware of. Software is good, but you have to know what to put in and where to put things.
Loeffler Financial has experienced tax preparers that take continual education courses to stay up-to-date with the latest tax laws and changes.
TAXES DURING A PANDEMIC.
2020 was a challenging year with the COVID-19 pandemic. Our firm keeps it easy and simple to file your taxes on time, YOUR way. We offer in person appointments, virtual zoom appointments, and our streamlined drop-off services that we have offered for numerous years! We have proper safety protocol to keep our clients, and staff as healthy and safe as possible. We sanitize and wipe down in between each tax appointment. We also provide glass shields and work at a 50% capacity which includes staff and clients in the building.
TAXPAYER CHECKLISTS AND FORM DOCUMENTS.
To help make things easier for you this tax season we have provided our Taxpayer Checklist, along with our Engagement Letter, so you can easily download these forms and fill them out before your scheduled appointment, and/or before you drop off your tax files. This also helps to make sure you have included all necessary documents to keep your tax return moving without any delays!
RENTAL PROPERTIES AND/OR SMALL BUSINESS TAX DOCUMENTS.
Have rental properties or small businesses? Those forms are included below for you as well!
WORK SMARTER, NOT HARDER.
This tax season we have you ready and prepared to make your tax filing smooth and easy!
With Tax Season among us, The Internal Revenue Service is reminding taxpayers that organizing tax records is an important first step for getting ready to prepare and file their 2020 tax return.
Taxpayers should keep all necessary records, such as W-2s, 1099s, receipts, canceled checks, mortgage statements, and other documents that support an item of income, or a deduction or credit, appearing on their tax return.
Taxpayers should develop a system that keeps all their important information together, which could include a software program for electronic records or a filing cabinet for paper documents in labeled folders. Having records readily at hand makes preparing a tax return easier.
To avoid refund delays, taxpayers should be sure to gather all year-end income documents so they can file a complete and accurate 2020 tax return.
Most taxpayers will receive income documents near the end of January including:
- Forms W-2, Wage and Tax Statement
- Form 1099-MISC, Miscellaneous Income
- Form 1099-INT, Interest Income
- Form 1099-NEC, Nonemployee Compensation
- Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund
- Form 1095-A, Health Insurance Marketplace Statements
Remember unemployment compensation is taxable
Millions of Americans received unemployment compensation in 2020, many of them for the first time. This compensation is taxable and must be included as gross income on their tax return.
Taxpayers can expect to receive a Form 1099-G showing their unemployment income. Taxpayers can elect to have federal taxes withheld from their unemployment benefits or make estimated tax payments, but many do not take these options. In that case, taxes on those benefits will be paid when the 2020 tax return is filed. Therefore, taxpayers who did not have tax withheld from their payments may see a smaller refund than expected or even have a tax bill.
Individuals who receive a Form 1099-G for unemployment compensation they did not receive should contact their state tax agency and request a corrected Form 1099-G. States should not issue Forms 1099-Gs to taxpayers they know to be victims of identity theft involving unemployment compensation.
Taxpayers who are victims of identity theft involving unemployment compensation should not file an identity theft affidavit with the IRS.
Why to file with an Accountant
The best way to file a complete and accurate return is finding a trusted tax professional. They can help navigate your tax return seamlessly and help you maximize the most out of your tax return. Our trusted experts at Loeffler Financial Group continually take courses and seminars to learn the ever changes tax laws. Covid-19 and the vast amount of unemployment has made this years tax filing a little more tricky. Loeffler Financial Group is here for you for all your financial needs and will help educate you on your individual or business circumstances and needs.
Book now!
Book your virtual appointment today, or take advantage of our contactless drop-off services we offer!
Contact us today at 717-393-7366 or email info@loefflerfinancial.com.
Come see the difference!
(Credits IRS.gov)
Tax season is about to begin across the country. If you’re like us, you probably never want to think about 2020 again, however you do need to file your 2020 taxes.
Thanks to the coronavirus, a lot has changed for the 2021 tax season. That’s why you need to start thinking about your tax situation
Loeffler Financial Group recommends scheduling an appointment with a tax professional to ensure taxes are accurate, especially with some people having major income changes due to unemployment, and pandemic relief programs and tax credits, including additional allowances for charitable donations and the Recovery Rebate Credit.
First, here are the main things you need to know right off the bat for the 2021 tax season:
- Tax Day is Thursday, April 15, 2021. You must file your 2020 tax returns by this date!
- The standard deduction for 2020 increased to $12,400 for single filers and $24,800 for married couples filing jointly.
- Income tax brackets increased in 2020 to account for inflation.
Tax Deductions and Credits to Consider for Tax Season 2021
When it comes to filing taxes there are 2 things to pay attention to: deductions and credits. Both help you keep more money in your pocket in different ways!
Tax deductions help lower how much of your income is subject to federal income taxes while tax credits lower your actual tax bill dollar for dollar.
Here are some deductions and credits you might be able to claim on your 2020 tax return:
Charitable Deductions
NEW this tax filing year, taxpayers who don’t itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations.
Medical Deductions
If you spent a lot of time in the hospital or have large medical bills, you might be able to find at least some tax relief.
You can deduct any medical expenses above 7.5% of your adjusted gross income (AGI), which is your total income minus other deductions you have already taken.
Business Deductions
If you’re self-employed, there are a bunch of deductions you can claim on your tax return—including travel expenses and the home office deduction if you use a part of your home to conduct business.
TAKE NOTE: If you’re one of the millions of workers who were sent home to work remotely through the pandemic, you won’t be able to claim the home office deduction since it’s reserved for self-employed individuals only.
Earned Income Tax Credit
The EITC is a refundable credit designed to help out lower-income workers. Depending on your income, your filing status and how many children you have, the credit could save you anywhere from a few hundred to a few thousand dollars on your taxes.
Child Tax Credit
Families can claim up to $2,000 per qualified child with this tax credit (the income limits for this credit are $200,000 for single parents and $400,000 for married couples).
You should work with a tax advisor who can make sure you’re not leaving any deductions or credits on the table. Depending on your situation there are other tax deductions and tax credits to take!
The Coronavirus and Your Taxes
Here are some things to keep in mind when you file your 2020 taxes:
Stimulus Checks
As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s $2 trillion relief package, the government sent out a stimulus check to millions of Americans.
This stimulus check will not count as taxable income. Instead, it’s being treated like a refundable tax credit for 2020. In layman’s terms, the stimulus check is like an advance on money you would have received as part of your tax refund in 2021.
Paycheck Protection Program (PPP) Loans
The CARES Act also tried to help struggling small business owners stay afloat by offering them Paycheck Protection Program (PPP) loans. As long as these loans were used on certain business expenses—payroll, rent or interest on mortgage payments, and utilities, to name a few—these loans were designed to be “forgiven.”
Unemployment Benefits
Many Americans found themselves out of work after the pandemic shut down turning to unemployment for assistance. Those who received unemployment benefits will need to pay income taxes on that money.
Retirement Plans: 401(k)s, IRAs and More
There were a lot of changes to retirement plans in 2020—and some of those changes could impact your tax bill this year. Let’s tackle each of those major changes:
- The CARES Act allows folks under age 59 and 1/2 to take up to $100,000 out of their 401(k)s and IRAs up until the end of 2020 without having to pay an early withdrawal penalty.
- Taking money out of your retirement accounts before retirement is a terrible idea—penalty or not.
- The money you take out of tax-deferred retirement accounts like a traditional 401(k) or IRA will be taxed as ordinary income.
- If you own a traditional IRA, you have to take money out of your account once you reach a certain age. Those withdrawals are called required minimum distributions (RMDs).
- The SECURE Act pushed back the age for RMDs from traditional IRAs from 70 and 1/2 to 72 (if your 70th birthday was July 1, 2019 or later).
- The CARES Act allows seniors to skip RMDs altogether in 2020 without penalty. This could lead to significant tax savings for retirees with those accounts since the money that’s taken out of a traditional IRA counts as taxable income.
- The SECURE Act also allows owners of traditional IRAs to keep putting money in their accounts past age 70 and 1/2 starting in 2020. Since the money you put into a traditional IRA is tax deductible, you could lower how much of your income is taxed this year.
One last thing—It’s probably a good idea to reach out to a tax advisor who can assist you and review all the new tax laws and changes for the upcoming tax season.
With the coronavirus still spiking, Loeffler Financial Group will continue their virtual tax appointments and consultations, along with their easy and stream-lined drop off tax services. Book your virtual appointment today, or call us to learn more about our drop off program.