Tax Time 2020 Checklist

Now that the ball has dropped and the confetti has been cleaned up it is now that wonderful time of year again, TAX TIME! Individual taxes are due April 15th, 2020, and business entities such as S-corporations and C-corporations are due March 16th, 2020 as the 15th falls on a Sunday.

The first items to gather will be your government forms. These include things such as your W-2s, 1099s, State Tax refund Forms, Mortgage Statements, and K-1s. The IRS’s requirement to when these need to be sent out varies, but most of them should start showing up in the last week of January. You will next want to gather all the items that may be a deduction for you. The main ones are related to medical expenses and insurances you paid, home interest and taxes, cash and non-cash donations to charity, student loan interest paid, health savings account contributions and IRA contributions. The IRS allows credits for certain expenses throughout the year. The most common credits are related to childcare expenses, college education expenses, and energy efficiency improvement costs.

If you operate a business or rental you will want to start gathering all the financial information that occurred over the past year related to that activity. Generally, any expense that is ordinary and necessary in the business industry will be an allowed deduction by the IRS. For example, if this is a rental activity this will include insurance, maintenance, utilities, and other expenses needed to maintain the rental. If the rental is a short-term rental like an Airbnb, make sure to tell your tax professional because short term rentals have different tax treatments than traditional rentals.