If you have yet to file your taxes, there are a few things you need to know! Here are some helpful tips to navigate this very different tax season.
What should taxpayers know concerning contacting the IRS during this time?
If you have tried to contact the IRS via phone, you may have been unable to get through. The IRS has announced all offices are set to reopen by July 13th. Here are a few numbers to note to contact the IRS:
- Questions concerning individual taxpayers – 1-800-829-1040
- Questions concerning business taxpayers – 1-800-829-1040
- Questions about an economic stimulus 1-800-919-983
If you are in need to obtain a copy of your prior year’s tax return, pay an account balance or simply review your account, you can create an online account at IRS.gov to retrieve important financial information.
What steps can taxpayers take to reduce their tax liability before July 15th?
IRA contributions: If you expect that you will owe taxes, you may still be able to take action. Individuals are able to contribute to an Individual retirement account prior to or on July 15th. The amount you are able to contribute and take as a tax deduction (traditional IRAs) is $6,000 or $7,000 if you are over the age of 70.
HSA contributions: In addition, this may also be a time to consider contributing to an HSA (health savings account) if you are eligible. HSA accounts allow individuals to contribute up to $3,550 for individuals (and $7,100 for family) in 2020. Amounts contributed can be utilized as a tax deduction. But keep in mind, HSAs are available to individuals who have a high deductible health plan (HDHP). The deadline to contribute is also July 15th.
What steps can businesses do at this time?
If you are a small business, this may also be a good time to review ways to reduce your business tax liability. One way a business can do just that is to review its business structure. Depending on how your business is set up will determine how it is also taxed. Take the time to determine which tax structure (sole proprietor, partnership, s-corporation, or corporate election) will result in a lesser amount of taxes.
Lastly, what are some possible overlooked tax deductions most often overlooked?
Some possible overlooked tax deductions individuals may want to consider during this time:
- Educational expense deductions for K-12 teachers or administration
- Deductible mortgage insurance premiums paid to the mortgage company
- Tuition and fees paid to further education and training
- Bad debt deduction if someone owes you money, you may be able to take it as a deduction on the tax return.