Tax FAQ For Tax Year 2020

Tax FAQ for Tax Year 2020

Q: When are my taxes due? A: May 17, 2021 is the due date for individual tax returns – Form 1040 – and making 2020 income tax payments. But there are other due dates you may need to know too: April 15: 1st estimated tax payment for 2021 April 15: income tax return for C corporations Q: Is my stimulus payment taxable? A: NO! Your stimulus payments (officially called Economic Impact Payments, or EIPs) are not taxable. Q: Why did my tax preparer/tax software ask how much I got for stimulus payments? A: Even though the EIPs aren’t taxable, they…

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How Freelancers, 1099 Workers, and Self-Employed Can Deduct 20% of Business Income

Did you know that you can deduct 20% of your business income on your personal tax return? You can, thanks to the Tax Cut and Jobs Act (TCJA). The TCJA brought a lot of tax changes for small business owners. And if you're self-employed, a freelancer, contractor, or had any 1099 income - even from a side gig - that includes you. The biggest tax change: A 20% deduction on self-employed business income called the Qualified Business Income Deduction. That means you will only pay income tax on 80% of your qualified business income. The 20% deduction is for income…

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How To Fill Out Schedule C If You’re Self-Employed

If you're self-employed, work as a freelancer or contractor, or have a side gig, you are a business. And that means you'll need to fill out Schedule C as part of your federal income tax return. When you use Schedule C, you can deduct business expenses against the money you earned to lower your income... and lower your tax bill. Your tax software will do all of the math for you – but you still have to enter all the correct information. After all, the tax software has no idea how much you spent on office supplies unless you tell…

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How To File Your Taxes For FREE In 2021

How to File Your Taxes for FREE in 2021

Want to file your taxes for free? You can... but you'll want to make sure you don't end up paying to "free-file." There are a lot of free tax prep programs available…and there are many that start out as free but then hit you with fees when it’s time to file. Here we’ll take a look at which options are really free, and whether they make sense for you. If Your Income Is $72,000 or Less  If your income is $72,000 or less, the easiest place to find legit 100% free tax filing software is the IRS website’s Free File…

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Save Money On Taxes: Make Your 2020 IRA Contribution Through April 15, 2021

Save Money on Taxes: Make Your 2020 IRA Contribution Through April 15, 2021

UPDATED FOR 2021 You still have plenty of time to lower your 2020 tax bill. For a win-win, make an IRA contribution for 2020. You can go with a currently tax-deductible traditional IRA or the Roth IRA (which is not deductible this year but offers many other advantages). As long as you put the money in by April 15, 2021, that contribution can count for 2020. If you haven't already maxed out your 2020 retirement plan contributions, it’s a good idea to do it now. With traditional IRAs, making the maximum $6,000 contribution ($7,000 if you’re 50 or older) could slash $600 or more…

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