Today's Hack

As you file your 2020 taxes, what do you need to be aware of to account for that unprecedented year? What changes were made and how should you prepare? We'll fill you in on the top tax tips.

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Show Notes For This Episode

Other Retirement Facts:

Now that we’re in February, we are definitely into tax season. Clients are reaching out and filling up appointments with Phil right now. What tax tips should you keep in mind as you prepare to file?

After receiving a few stimulus checks in the past year, you may have wondered if it was taxable. How will this look on your taxes? What happens if you got too much or too little in your stimulus check? 

From 2019 to 2020 taxes, did the tax brackets change? How was it adjusted for inflation? When might the structure of the tax brackets change in the future as it stands now?

The CARES Act allowed for an additional $300 in donations, even if you chose the standard deduction. What is an above-the-line deduction? For those who have not been near the standard deduction level in the past, make sure you bring it to your tax preparer this year. It’s not a large amount, but every dollar adds up.

Another thing the CARES Act did was remove the obligation to take RMDs. Is it possible that the same benefit will be extended in 2021? So far, this hasn’t been the case this year, but you have until the end of the year to take your withdrawal. Are you turning 72 this year?

Can you take a deduction for your home office, especially after being forced to work most of the year from home? Unfortunately, this benefit only applies to independent contractors.

When should you use a CPA compared to doing something on your own or with TurboTax? It really depends on your scenario. Are you doing tax planning throughout the year? What’s the difference between tax preparation vs. tax planning? Which one are you really getting right now?

0:24 – Tax season has begun!

1:20 – Are the stimulus payments taxable?

2:53 – Any changes on the tax brackets?

3:51 – What do you need to know about charitable giving?

5:13 – What is the deal with RMDs in 2020 and 2021?

8:48 – Can you claim a home office after working from home?

10:44 – Why might a CPA be better than DIY?

12:46 – What is tax prep vs. tax planning?

Thanks for listening! We’ll be back with another episode next week.

A Quotable Moment:

There’s a few things at the end of the year that you might be able to do that can happen after the fact, but the vast majority of items that get reported on a tax return get closed out with the calendar year.

-Phil Putney

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