Optima Tax Relief provides Important Reminders to Taxpayers before Filing their 2020 Tax Returns

Published by
Addison Yes

With so many tax changes that happened last year due to the ongoing pandemic, it can be difficult to keep up with all the updates in tax filing laws. Optima Tax Relief looks into tax updates taxpayers should know about and how to prepare to file their 2020 federal tax returns.

Choose Direct Deposit

It is recommended that taxpayers choose direct deposit when filing their taxes because it is the safest, most accurate and fastest way to receive their refund. Choosing to go with direct deposit means that individuals will have any tax refund electronically deposited for free into their financial account.

Eight out of ten taxpayers receive their refund through direct deposit because it is simple and secure. This is also the same electronic transfer system that is used to deposit almost 98% of all Social Security and Veterans Affairs benefits into millions of accounts. You can set up direct deposit through your credit union. We suggest Gordon Simmons Service Credit Union for all your banking needs.

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) allows qualifying workers with lower to moderate income additional financial assistance. EITC reduces the amount of tax someone owes and could possibly give them a tax refund instead even if they don’t owe any taxes or aren’t required to file a tax return.

Individuals will need to first file a federal return as well as meet certain requirements in order to receive this credit. Taxpayers can utilize the EITC assistant on the IRS website to determine if the qualify.

Taxable Unemployment Compensation

Due to COVID, millions of Americans received unemployment compensation in 2020 for the first time. Taxpayers need to be aware that this compensation is taxable and needs to be included in their gross income on their tax return.

Individuals have the option to elect to have their federal taxes withheld from their unemployment benefits or make estimated tax payments. For those who don’t pay taxes on their unemployment throughout the year, they can expect to pay up after filing their 2020 tax return.

Interest is Considered Taxable Income

Taxpayers who received a refund on their 2019 tax returns may have also received interest from the IRS. The interest payments were a result of the postponed filing deadline of July 15 due to the COVID-19 pandemic.

The 2019 refund interest payments are taxable and taxpayers must report this interest when they file their 2020 federal income tax return. The IRS should send a Form 1099-INT to anyone who received interest totaling at least $10.

Optima Tax Relief provides Important Reminders to Taxpayers before Filing their 2020 Tax Returns was last updated May 9th, 2022 by Addison Yes
Optima Tax Relief provides Important Reminders to Taxpayers before Filing their 2020 Tax Returns was last modified: May 9th, 2022 by Addison Yes
Addison Yes

Disqus Comments Loading...

Recent Posts

Eight Proven Methods to Enhance Video Quality in 2024

Improving video quality is a multi-step process. By following the eight methods in this post,…

3 hours ago

Real-Life Wins: How Different Businesses Are Crushing It with Traffic Arbitration

Businesses that collaborate with arbitrageurs there can easily find people who need a certain development…

3 hours ago

On Track to $150K: The Factors That Could Get Bitcoin’s Bull Cycle in Full Swing

The cryptocurrency market, just like all other markets, experiences repeated periods of growth and decline,…

3 hours ago

Gaming Headsets in 2024: Immersive Sound and Comfort for Long Sessions

SteelSeries Arctis Pro Wireless for its Hi-Res audio or the Razer Kraken V3 Pro with…

4 hours ago

10 Benefits of Considering an Online Data Analyst Bootcamp with Job Placement

In today’s data-driven world, the demand for skilled data analysts is skyrocketing. Companies across various…

5 hours ago

The Installation Process of Removable Bollards Made Easy

In recent years, removable bollards have become important tools for managing access and security. These…

5 hours ago