With many individuals and business owners already facing unprecedented financial strains, making sure you're prepared to file your 2020 taxes will help you preempt any possible issues. Finding a professional to help with your accounting in Las Vegas is a great first step. However, it's also a good idea to understand some of the changes that are unique to the 2020 tax year.
One of the most discussed provisions of the CARES act was the stimulus payment checks. Unfortunately, there's much confusion about how these payments impact your 2020 tax return. Your stimulus payment was an advance on your refundable tax credit for the 2020 tax year. What does this mean?
To put it simply, you get to keep all of the money you received and won't owe any taxes on it. If it turns out you were overpaid, you get to keep the overage. On the other hand, if you find that you should have received more, you can claim the additional amount you should have received when you file your 2020 taxes.
Another important provision of the CARES Act allows business owners to carry their Net Operating Losses (NOLs) for the 2018, 2019 and 2020 tax years back five years to create refunds against prior taxes. This creates many opportunities. However, it's another reason why you really need professional accounting in Las Vegas. It's critical to make sure everything is filed correctly. There are also time limitations you'll need to adhere to, so it's a good idea to consult with your tax pro as early as possible.
If you didn't qualify for PPP or an EIDL loan, you may have had to withdraw from your retirement account to keep yourself afloat. The good news is, if you qualify for a coronavirus-related distribution (CRD), you won't have to pay the 10% early withdrawal penalty. If you're able to pay it back within three years, it's also considered a non-taxable rollover instead of a taxable withdrawal. Professional accounting in Las Vegas will help you keep track of these details so you don't end up paying more than you should.
Despite the date push-backs we saw in 2020, it's important to note that as of now, individual and corporate tax returns for the 2020 tax year must be filed by April 15th, 2021. For partnerships and S-corporations, the filing deadline is March 15th, 2021. Hiring a team to take care of your accounting will ensure that you're prepared to get your returns filed in time.
These are just a few of the many changes you'll need to know about when filing your 2020 tax return. Now, more than ever, it's important to make sure you've got your ducks in a row. If you're not already using professional accounting, now is the time to turn it over to someone with the knowledge and experience to make sure everything is done right.
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