Spring is the season of warmer weather and blossoming flowers, but it is also – usually — the season of taxes. Tax Day is typically April 15, but the Internal Revenue Service (IRS) recently extended the deadline for filing and paying your 2019 federal income taxes to July 15, 2020.
While this gives you more time to get your tax records in order, the IRS recommends that anyone expecting to receive a tax refund should file as soon as possible. According to the IRS, most refunds are being issued within three weeks of a tax return’s acceptance. You should also double check your state’s tax deadlines. Some states have announced tax filing or payment extensions, but other deadlines remain in place.
Here are five other changes to keep in mind while you prepare your 2019 taxes:
• There is no longer a federal tax penalty for not having health insurance. However, some states will charge their own penalties for taxpayers who did not have health insurance in 2019.
• The standard deduction increased to $24,800 for married couples filing jointly and to $12,400 for single filers.
• If you received, sold, sent or exchanged any virtual currency in 2019, you will need to report that on your tax return.
• Mortgage insurance premiums above $600 are now deductible. Mortgage premiums can also be retroactively applied to 2018.
• The Child Tax Credit doubled to $2,000 per child, up to $1,400 of which is refundable. The credit is also available to more families for the 2019 tax year, since the income thresholds for when this benefit phases out were raised to $400,000 for married couples filing jointly and $200,000 for individual filers.
Experts say it is never too early to begin thinking about and planning for the next year’s taxes. Once you have filed your 2019 return, you may want to consider speaking to a Certified Financial Planner (CFP) professional for guidance on maximizing your 2020 tax benefits. A CFP professional can help you understand tax rules for retirement accounts, such as pre-tax contribution limits and tax credits available to savers, for example. You can find a CFP professional near you by visiting www.letsmakeaplan.org.
Timely and thoughtful tax preparation is an important part of a comprehensive financial plan.
-Statepoint
