What to remember for the new 2020 Tax Deadline

Normally at this time of year, your income tax returns would be a distant memory. But this is not a normal year. The IRS pushed the April 15 deadline for filing individual income taxes out to July 15 due to the COVID-19 crisis, and most states – including Ohio – followed suit.

So, if you haven’t filed your income tax returns yet, that July 15 deadline is beginning to bear down on you.

Beware that if you can’t file by July 15, you can get an extension to Oct. 15. However, even if you get an extension, you must pay the amount of taxes you believe you will owe on or before July 15.

Here are a few things to pull together in order to make your tax experience less, well, “taxing” this year:

2019 income documentation. You’ve done this before, so you know you need your W-2 forms detailing income from any employment that you have, as well as 1099 forms for any freelance or consulting work that you do.

Investment statements. In January you should have received end-of-year statements detailing the gains and/or losses for any investments that you hold.

Business financial records. Do you own a pass-through business? Most small businesses that are not legally organized as corporations are some type of pass-through business. This can include sole proprietorships, S corporations, and several types of partnerships. “Pass-through” refers to the fact that your business doesn’t pay tax on its income; rather, your business income passes through to your personal income tax return. You will need your profit and loss documentation, as well as documentation of business expenses, depreciation and other financial matters.

Tuition documentation. Were you in college, or did you have a kid in college at any point in 2019? You probably received a 1098-T Tuition Statement documenting how much tuition you paid in 2019. If you didn’t receive it in the mail, have your student check his/her online college account for a PDF version. This document will help you access the American Opportunity Tax Credit, which can knock up to $2,500 off your tax bill if you qualify.

Ohio state income tax documentation. For your state income tax return, you will need the same documentation as for the federal tax return, as well as additional documentation related to several state deductions for which you may qualify. For instance, if you set aside money in an Ohio STABLE account every year for the care of a child with a disability, you will need that documentation to support your state tax deduction. Other income adjustments for which you may need documentation relate to college savings plans, income from military duty, and medical expenses.

It’s important to remember this tax filing deadline is for your 2019 income taxes. If you have had major changes in 2020 due to the COVID-19 crisis – for instance, losing a job and receiving unemployment benefits – they will be reflected on your 2020 income tax returns that you file next year. But it’s never too early to prepare. Be sure to keep all documentation related to your employment status and any unemployment benefits you receive this year.

Important note: Ohio unemployment benefits are subject to income tax. If you are receiving unemployment compensation but not having state income taxes withheld, you may be required to pay estimated taxes this year. Look at your payment statement or pay stub to ascertain whether state income taxes are being withheld.

If you have questions about filing your federal or state income tax returns this year, please contact our advisors.

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