The tax deadline is May 17—there's still time!
Some of us at the OCN have yet to file our 2020 taxes, so here are some top tax tips for those who are up against the clock to get them filed by May 17. We enlisted some last-minute advice from Carla M. Vaughn, MBA and small business owner of Business & Financial Management Services and nonprofit Financial Literacy First.
- The government allows for $300 charitable contributions without receipts to lower your adjusted gross income—so that means, $300 less on the tax table.
- If you received unemployment in 2020, the IRS is waiving a maximum of $10,200.00 received on the federal side. In a nutshell, $10,200.00 becomes non-taxable. If you had federal deductions taken out, the government will pay you back those deductions.
- If you took money from a retirement plan, under 59 1/2 years old, and claim a COVID-related reason for doing so, you won't have to pay taxes on that money for three years.
- If you have a tax liability, you can defer 25% of your payment until June.
- There is additional tax relief if your wages were decreased due to COVID and/or if you were caring for someone with COVID. Ask your tax preparer.
- Prior EIDL or PPP recipients are eligible to reapply to their original lender. Ask for reconsideration for an increase instead of having to go through the entire application process again.
- PPP has been extended through May 31 and you no longer have to have W2 wages to apply. If you have paid contractors, you're eligible for a loan as long as your Schedule C reflects paid wages.
May 17 is just around the corner so you still have a few days to get your taxes filed. Vaughn says, "If you're not 100% for sure on filing your taxes, ask a professional, especially if it involves depreciation. If you feel pressure, file an extension."
2020 has been a crazy year (to say the least), so if you need to file an extension, there's no problem with that, but don't delay. The file extension date is October 16.
Did you save your tax filing for the last minute or did you complete it months ago? Let us know in the comments.