How to Master Your 2020 Taxes

Welcome to 2020! A new year, and a new decade. With that being said, in addition to resetting your budget, your taxes are your main priority this month. Filing your taxes doesn’t have to be as challenging when we take things step-by-step. Are you ready to slay tax season this 2020?

Let’s get started!

Our Free Household Management Guide will help when getting budget ready for your taxes

Gather your 2019 Documents and Receipts

Start compiling your documents as you receive them and keep them in your designated tax return folder. Make sure you have received all of your documents to avoid having to amend your tax return. Employers have until January 31, 2020 to send out W-2 and 1099 forms. Include in your folder your bank interest, student loan statements, car payments, mortgage statements and if you made a withdrawal from a qualifying retirement account from 2019.

Determine Your Filing Status on your Taxes

If your marital status circumstances have not changed since the previous tax filing, chances are you can keep the same status. Selecting the correct option can set the tone for the opportunities you have with deductions and how your income is taxed. Review the qualifications provided and be honest with your selection.

Tax Refund vs. Tax Payment 

If you are entitled to a tax refund, confirm your bank information to ensure you actually receive your money. The IRS allows you to deposit your refund in up to three different bank accounts, however, this will require you to triple check the information for each account so you receive your tax refunds as expected. The IRS will not be held responsible for retrieving money because of errors.

Now, if you end up owing the IRS, you have several options for sending payments. You will be given the opportunity to:

  • Pay online
  • Through your bank
  • A credit/debit card
  • Mail a check

If you set up a payment plan, payments can be automatically withdrawn from your bank account. To avoid owing for the next year, make the necessary adjustments with your employer to ensure the proper amount of taxes is taken out of your future paychecks.

Federal Tax Extension 

When you need additional time to file your federal taxes, you can request an extension with Form 4868 to get an additional 6 months. While this offers some breathing room, if you owe taxes you will still be required to pay your estimated taxes by April 15. If you can’t afford to pay the full amount, make sure to request a payment plan and follow through with it.

You have put your financial life first and you are doing an amazing job! Keep Investing In You.

Sincerely, Joy