Tax Season 2020: What you need to know
Updated: Jan 29, 2020
Stop worrying about the winter, something much more important is almost here. Iam talking about the tax season this 2020 and Iam pretty sure that the last thing your want to do is just wait till last week before April 15 to either call and specialist on income tax declaration to help you filing up all the electronic paperwork or to start searching around home trying to find all those receipts you have got hidden around.
In LatinoService we like to keep you updated and informed, so here is a quick resume of a few things you might want to know for this Tax season 2020.
Changes on 2020 Tax Season 2020
Ok let´s make a quick recap. We all remember 2018, when the tax reform bill was approved, this event leet to a radical change in tax rates and also tax brackets, affecting millions of Americans. Most of this changes took place in 2018, however thereare some other changes that are just taking place this 2020. Here are some of them:
Penalty for not having health insurance is gone!.
Tax brackets were raised in 2019 due to inflation.
Tax standard deduction has been raised to $12 200 for tax declaration individual filers.
Tax standard deduction has been raised to $24 400 for couples filing tax declaration jointly.
Let´s dig a little bit dipper into each of these changes.
There is no longer a penalty for not having health insurance.
The Affordable care act, also known as Obamacare that created laws to protect Americans, it´s still on place. But the penalty that you had to pay for not owning a health insurance is gone. Yeah, i know, iam pretty sure there are lots of people celebrating right now. This change in case you want to know took place in 2019. No more $695 penalty fee is gone.
Brackets and deduction for this 2020
First let´s make sure everybody understands how brackets work. Let´s say you are a young 30 year old empowdered woman, that earns $80 000 a year, which means your tax rate is 22% just as the chart below shows. Now, don´t get confused this does not means you are supposed to pay 22% out of $80 000. First you pay 10% out of $9 700, then 12% out of $39 475 (39475-9700 actually) and finally you pay 22% out of the remaining amount (80000-39475) of your income.
Brackets and tax rates for this 2020
What hasn´t change this 2020
The child tax credit: The 2018 tax reform brought with it a raised on tax credit for up to $2000 per kid that qualifies. It also created a new credit limit of up to $400000 for couples and $20000 for individual filers.°
Using plan 529: If you own a college 529 saving plan for your child. You can now use for another type of education other than college. For example a private school or tutoring your child through middle school completely tax free.°
Charity tax deduction: You can actually deduct up to 20% of your taxes donating in qualified charity organizations, that is for individual filers, there some other options available for married and companies. So you better start donating and helping!°
Homeowners Mortgage Credit: Ok so in 2018 the maximum principal was lowered to $750000. But this doesnt apply if you already owned a mortgage between $750000 or $1 million, so make sure you contact an authorized agent.°
No more home equity Debt credit: Don´t get money against your home, specially now that you no longer get a deduction on the interest paid on your home equity debt.°
2020 Tax Season Dates
At LatinoService we try to be as organized as posible, so make sure you have take your time and write this dates down, let´s get as organized as a tax preparer. We know tax date isn’t until April 15 but you know that problems come when you last expect them , so take waiting till last minute is just a terrible decision. Not only you will have the most stressful time, but would be missing out on some of the benefits of filing your taxes early.
Now with that being said here are the dates that you need to keep tagged on your calendar:
January 27, 2020: The IRS has already confirmed tax season starting date. but this will be the official start of tax season. Until then we should try to get all the tax forms and information in order, so you can get your taxes out of the way. When January 27, comes you will be able to get online access to your W-2 form—the form employees use to report their income or you can also have it delivered to you by your employer by this date. (The deadline is January 31st so please keep that in mind!!). Remember if you did freelance or contract work for a business or client, then you might get a 1099-MISC form that you’ll use to report your income. If you haven’t received your forms by the end of January, you better get in contact with your company’s human resources department to get it done.
April 15, 2020: This is the famous “Tax Day". Open up those champaing bottles because your 2019 income tax is coming home. It’s also the last day to request a six-month extension if you need more time to file your taxes. BUT be careful a extension to file your taxes does not mean you get an extension on PAYING those taxes, so make sure you get your IRS payments in order if you do not want to pay a late penalty fee and getting charged even more money.
June 15, 2020: If you live overseas or you’re on military duty outside of the United States, your taxes are still due on April 15,but you’re given an automatic two-month extension to file your taxes (without needing to request one).But keep in mind that special rules may apply if you served or are serving in the Armed Forces in a combat zone or a contingency operation, or become hospitalized resulting from an injury received while serving in such an area or operation. You generally have at least 180 days after you leave the designated combat zone/contingency operation to file and pay taxes. If the Service determines you to be affected by a presidentially declared disaster or a terroristic or military action, you may have up to one year after the due date of your return to file and pay taxes, depending on the deadline specified by the Service.
October 15, 2020: If you filed a six month extension to file your 2019 taxes? This is the deadline to file those tax returns.
If you are self employed and pay quarterly taxes (or estimated taxes) throughout the year. In the box below you will find the deadlines for your 2020 taxes:
Tax return dates this 2020
LET US GET YOUR TAXES DONE QUICK AND EASY
At Latino Service we are here to serve you and our immigrant community. Requesting help with your taxes is a smart move especially if they are in a complicated situation or you own a business. This way you outsource this process and save time, stress and money. Feel free to contact us if you need help from a professional.