How to prepare for an unusual tax season
“2020 was full of challenges, changes and plenty of uncertainty. While we’re optimistic for the year ahead, it’s important for Americans to understand how major life events, such as changes in employment or residence, can impact tax filing this year,” says Chad Prashad, CEO of World Acceptance Corporation, parent company of World Finance.
Having prepared approximately 84,000 returns last year, World Finance is offering tips to lessen tax season headaches this year, while helping you maximize the value and timeliness of your tax return.
• Make a plan and start early. Start by identifying how you’re going to file your taxes, such as through an online program or with the help of a professional expert. Gather all tax forms, such as W-2s from your employer or a 1099 form if you’re self-employed, relevant expense receipts, as well as statements from banks or other financial institutions. The quicker you get your taxes filed, the faster you’ll receive your return. Visit IRS.gov for the latest tax information.
• Check for tax credits and deductions. Due to the pandemic, you may have had to make major lifestyle changes, some of which could result in a tax credit or deduction that reduces your amount owed. The cost of setting up a home office, the purchase of a vehicle in lieu of taking public transportation and childcare expenses are all examples of possible tax credits or deductions. Check out irs.gov/credits-deductions-for-individuals for a list of other deductions and possible credits.
• Consider additional COVID-19 impacts. If you lost a job due to COVID-19 and received unemployment benefits, remember that income is taxable. The CARES Act also created provisions that could benefit your tax return, including allowing above-the-line deductions for donations to charity, waiving the penalty for early withdrawal from retirement accounts and more. Visit irs.gov/coronavirus-tax-relief-and-economic-impact-payments for more information.
• Work with a tax preparation service. Feeling overwhelmed? Working with a reputable tax preparation service partner can help you identify any additional deductions available and can add to your return.
In an unusual year, filing taxes can come with additional stress and uncertainty. Following some simple tips can help ensure you secure the best possible outcome.
This information is provided by Voya for your education only. Neither Voya nor its representatives offer tax or legal advice. Please consult your tax or legal advisor before making a tax-related investment/ insurance decision.