This week’s blog post is more of an alert. I’ve been telling clients that the filing deadline for tax year 2020 is April 15 and until recently, it was. There’s also been a change in filing for those who may have received unemployment benefits in 2020. The IRS has also instituted a new National Virtual Settlement Days program. Read on for more information on each of these topics, and keep in mind that the IRS may add further changes.
Tax Filing Extended – The IRS has announced that the filing deadline for the 2020 tax year has been extended. Originally, it would have been April 15. The new deadline for filing 2020 taxes is Monday, May 17 for filing and paying. Luckily, if you are a California resident, our state has coordinated its filing deadline to pay taxes for 2020 with the federal government. Both your federal and state returns are due Monday, May 17.
One point to note, the state and federal extension does not apply to quarterly estimated tax payments. Those are still due April 15 for both California and federal.
2020 Unemployment Benefits – Did you or your spouse receive unemployment compensation in 2020? Well, there’s some more good news. Normally, unemployment benefits are taxable. For unemployment compensation received in 2020, you can exclude up to $10,200 for each person receiving unemployment compensation. Now, as with everything IRS, there is a calculation. This adjustment is made on Schedule 1, Line 7 of form 1040. You can review IRS instructions here and preview the exclusion worksheet. Of note, there is an AGI limitation of $150,000. If your AGI is $150,000 or more, you are unable to exclude the tax on unemployment compensation.
Virtual Settlement Days – Do you have a case pending with the IRS Tax Court? If so, you may be receiving an invite from the IRS to participate in National Virtual Settlement Days. All of March 2021 has been designated as National Settlement Month. I wouldn’t be surprised if this program gets extended. Should you reach a settlement, IRS personnel will be available to arrange payment options with you. Read more about the expansion of the National Virtual Settlement Days program.
That’s it for now. If you are having problems with your tax filing each year, or have landed in Tax Court, reach out to me and I can give you a referral for tax preparation. We can also work on getting your tax situation squared away for future years. As an independent CERTIFIED FINANCIAL PLANNER™, I can help you make better financial decisions. Contact me and let’s get started. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #tax #IRS #VirtualSettlementDays #CFPPro #savemoney #pandemic #COVID