What You Need to Know About This Year’s Tax Return

If you’re like most people, you’d like to put 2020 solidly behind you. Unfortunately, there’s still one lingering task that you’ll need to cross off last year’s list: you need to file your 2020 taxes.

Below are just a few of the things you’ll want to keep in mind.

Tax deadlines

The deadline to file your federal income taxes is April 15, 2021. If you’re a US citizen living abroad, your deadline to file is June 15.

Partnership returns are due on March 15, but if you file an extension, you’ll have until September 15.

C-corporation tax returns are due on April 15. If you need an extension, the deadline can be pushed to October 15.

S-corporation tax returns are also due on March 15 (if the S-corp operates on a calendar year.) If you need to file for an extension, you’ll have until September 15 to file.

The standard deduction increased

One of the most important things you’ll want to note about the current tax season is that the standard deduction for single filers has increased by $200, to $12,400. The standard deduction for married couples filing joint returns has been bumped from $24,400 to $24,800. Married couples filing separately can each take a $12,400 deduction (as opposed to the $12,200 deduction for 2019), and individuals filing as head of household will have a standard deduction of $18,650, against $18,350 in 2019.

How COVID-19 might impact your taxes

If you’re concerned that you’ll need to pay taxes on the Coronavirus Aid, Relief and Economic Security (CARES) act stimulus checks, you can rest easy. The 2020 stimulus checks will not count toward your taxable income.

If your business received a Paycheck Protection Program (PPP) Loan, as long as the loan was used according to the program’s guidelines (i.e., specific percentages of the funds were used to cover rent, utilities, mortgage payments, and payroll, among others), the loan will be “forgiven.”  Additionally, PPP funds that were used to pay eligible expenses can be deducted from last year’s taxable income. For more information on how this works, be sure to speak with a knowledgeable CPA.

In Closing

If you haven’t prepared your 2020 taxes yet and you have questions about filing last year’s return, we can help. The experts at Hughes, Snell & CO., PA is a full-service financial services firm that’s experienced in working with all types of clients.