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Archive for February 10th, 2021

New Key Items on 2020 Tax Returns

Wednesday, February 10th, 2021

There are new key things to consider when filing your 2020 tax return. These items may affect the amount of your refunds or amounts you owe so you want to make sure to pay close attention to them:

• Recovery Rebate Credit – Taxpayers may be able to claim the recovery rebate credit if they met the eligibility requirements in 2020 and one of the following applies to them:
1) They didn’t receive an Economic Impact Payment in 2020.
2) They are single and their payment was less than $1,200.
3) They are married, filed jointly for 2018 or 2019 and their payment was less than $2,400.
4) They didn’t receive $500 for each qualifying child.

• Refund Interest Payment – Some people who received refunds for their 2019 tax returns may have been paid interest by the IRS. These interest payments would have been received separately from your refund, they were not paid together in one lump sum. These interest payments are taxable and must be reported on your 2020 tax return. In January 2021 the IRS will send out Form 1099-INT to anyone who received an interest payment of $10 or more.

• New Charity Deduction Allowance – New for 2020 is that most taxpayers who do not itemize can deduct up to $300 of cash charity contributions made to qualified organizations.

Please consult your tax advisor on all the above information.