If you’re like the majority of Stone Mountain and Atlanta residents, the last thing you want to worry about right now is 2020 taxes; however, everyone knows that tax season will go more smoothly if you are prepared in advance. Take the time now so that, when spring comes, you won’t have inordinate amounts of organizing, documentation, and receipt management to catch up on. Here at NTRC Tax, we want your personal taxes and small business taxes for next year to be as easy and streamlined as possible – even if you do them yourself!
Personal Financial Help: Collect Your Materials
The biggest thing to consider each year as you prepare your taxes is whether you should change your filing status or not. Sometimes it may actually benefit you to file as single if you are married – this may actually change from year to year! If you are unsure, we’re always available for questions regarding personal taxes. As you collect your documents over the course of the next few months, file them in a safe place and label your files accordingly. A little bit of organization will go a long way towards streamlining your tax filing come February.
As we all reflect on the previous year, it can also be a time to plan for the future and make some changes. One of these changes might include staying on top of financials; set a reminder each week to update your work expenses or miles travelled. A mere five minutes each week could save you hours for the next time tax season rolls around!
Human Resources and Tax Status
Many people often forget that taxes are automatically deducted from their paychecks. The amount that gets deducted is based on what filing status you declare with your employer; if you add a new dependent to your family, don’t forget that you can claim an additional dependent on your tax withholdings, too! Even if you don’t want to change your withholdings right away, it’s good to start thinking about how your taxes will be filed differently this year compared to 2019.
Start Planning Moves to Lower Taxable Income
If you have stocks that are underperforming, you may wish to cash them out so that you can report a loss on 2020’s taxes. Other areas to consider would be your 401k investments (up to $19,500; $26,000 if over 50) and IRA accounts. The more you contribute to these investment accounts, the lower your taxable income will be for the year. In addition to these investments, you can also make donations to charitable foundations and religious groups to lower your taxable income. As the end of 2020 approaches, you can be thinking about how you’d like to disperse your available funds.
This year has been a challenge for most of us, so lets start 2021 by being prepared for the future. Let us know if you have any questions about your personal or small business taxes for this year – we’re happy to help with whatever you need.