A year as unusual and challenging as 2020 means there may be some additional factors that can impact your tax return, from stimulus payments, potential job changes and unemployment benefits, to virtual work transitions and more.
If you want to reduce the money you owe the IRS, you need to claim all of the tax deductions and credits that are available to you. Both deductions and credits can have a big effect on reducing your tax bill, but they are definitely not the same -- and one is much more valuable than the other.
Social Security provides a guaranteed source of income in retirement, but what many don't realize is that you're not guaranteed to keep it all. Some retirees owe taxes on their Social Security benefits, but it all depends on your income. Here's a closer look at how your retirement fund withdrawals play into all of this.
The advantage of accumulating after-tax assets in a retirement account is that when they are distributed, the amounts will be tax- and penalty-free. However, this benefit is realized only if the necessary steps are taken.