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February 2021

Image of woman with calculator illustrates blog: Standard Deduction or Itemized Deductions: What Is the Difference?

Standard Deduction or Itemized Deductions: What Is the Difference?

Today, we talk about a basic tax topic: the difference between standard deduction and itemized deductions. Keep reading to learn more!

What Is the Standard Deduction

The standard deduction is an amount that reduces taxable income. This deduction is adjusted every year and varies according to your filing status.

You can benefit from the standard deduction if your standard deduction is larger than the total of your allowable itemized deductions.

To know how much is your standard deductions and to figure out whether you must detail your deductions, use this interactive assistant made by the IRS.

What Are Itemized Deductions?

In some cases, itemized deductions allow taxpayers to get a larger deduction, but to take advantage of this you must keep rigorous records of your expenses. Also, it’s important to keep in mind that some taxpayers are not allowed to use the standard deduction.

You ca benefit from itemizing your deductions if you:

  • Had large uninsured medical and dental expenses
  • Paid interest and taxes on their home
  • Had large uninsured casualty or theft losses
  • Made large contributions to qualified charities

Donations

Tax law changes allow taxpayers to deduct cash donations of up to $300 made by December 31, 2020, without having to itemize when they file their 2020 tax return.

If you need help deciding whether you should go for the standard deduction or itemized deductions, don’t hesitate to contact our experts at JT Tax Services. We’ll be more than happy to offer the knowledgeable assistance you need.

More Tips About Taxes

Interested in learning more about taxes? Then you’ve come to the right place! Here are some previous posts you may find interesting.

Contact the Experts at JT Tax Services

At JT Tax Services, we give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

We are located in Oxnard, California. Contact us today by email (info@jttaxservices.com), telephone (805-984-8890), or through our social media accounts on FacebookTwitter, and LinkedIn to schedule a consultation or to learn more about our services.

Image of man in front of computer illustrates blog: 5 Mistakes to Avoid When Filing Your Tax Return

5 Mistakes to Avoid When Filing Your Tax Return

With tax season just around the corner, this is the perfect time to review five mistakes you should avoid to make tax filing easier, faster, and more accurate.

1. Basic Information That Is Wrong or Missing

Getting the basics right goes a long way toward filing a precise, error-free tax return. As you prepare your return, triple check to make sure that these fields are included and are accurate:

  • Social Security numbers: Every SSN on your tax return should appear exactly as printed on the Social Security Card.
  • Misspelled names: The same principle applies here—all names must appear as written on the Social Security card of the person.
  • Incorrect filing status: This information indicates whether you were married or single on December 31, 2020, and determines the amount of tax you should pay. To learn more about filing statuses, take a look at this previous post. You can also use the IRS Interactive Assistant to figure out your correct status.
  • Incorrect bank account numbers: Your routing and account numbers should be accurate, so you can get your refund as soon as possible.

2. Math Errors

Let’s admit it: Math is not everyone’s strong suit. That’s why you should pay special attention to the math on your tax return. Using tax software or working with a professional tax preparer greatly reduces this type of mistakes. However, every taxpayer should always double check the math on their return.

3. Mistakes Figuring Credits or Reductions

There have been many changes to tax law due to the COVID-19 pandemic, so the odds or making this type of mistake are higher than usual. With options available that include earned income tax credit, child and dependent tax credit, and recovery rebate credit, it’s advisable to seek assistance from a professional to determine which are the options you qualify for.

4. Unsigned Forms

This is particularly important because an unsigned tax return isn’t valid. There are some exceptions, as in the case of members of the armed forces or taxpayers with a valid power of attorney. But generally speaking, all taxpayers must make sure that their return is signed.

5. Expired ITIN

ITIN stands for Individual Taxpayer Identification Number, and as its name suggests, it helps the IRS keep track of every individual taxpayer. If your ITIN expired, the IRS will treat it as a return filed on time, but it won’t apply any exemptions or credits. Once you renew your ITIN, the agency will process your return normally.

More Tips About Taxes

Interested in learning more about taxes? Then you’ve come to the right place! Here are some previous posts you may find interesting.

Contact the Experts at JT Tax Services

At JT Tax Services, we give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

We are located in Oxnard, California. Contact us today by email (info@jttaxservices.com), telephone (805-984-8890), or through our social media accounts on FacebookTwitter, and LinkedIn to schedule a consultation or to learn more about our services.

Remember: Tax Season Is Almost Here!

Remember: Tax Season Is Almost Here!

Tax season begins Friday, February 12! This means that starting from that date, the IRS will accept and process 2020 tax returns. Here are some tips you should keep in mind to ensure that your tax filing experience is smooth, agile, and stress-free.

General Tips

The IRS recommends that all taxpayers consider these tips as they prepare their tax return:

  • Combining electronic filing with direct deposit ensures that you get your refund as soon as possible.
  • Don’t count on receiving your refund by a specific date, especially if you plan to use that money to pay bills.
  • Remember that unemployment compensation is taxable

The Documents You Should Gather

This is the right time to get your tax records in order, so make sure to have all the documents that apply among the following:

  • Any receipts, canceled checks, and other documents that support an item on your return.
  • Forms W-2, Wage and Tax Statement
  • Form 1099-MISC, Miscellaneous Income
  • Form 1099-INT, Interest Income
  • Form 1099-NEC, Nonemployee Compensation
  • Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund
  • Form 1095-A, Health Insurance Marketplace Statements

Other Important Tax Dates to Keep in Mind

In addition to February 12, other important dates that taxpayers should keep in mind during 2021 include:

  • Thursday, April 15. Due date for filing 2020 tax returns or requesting extension of time to file.
  • Thursday, April 15. Due date for paying 2020 tax owed to avoid owing interest and penalties.
  • Friday, October 15. Due date to file for those requesting an extension on their 2020 tax returns.

More Tips About Taxes

Interested in learning more about taxes? Then you’ve come to the right place! Here are some previous posts you may find interesting.

Contact the Experts at JT Tax Services

At JT Tax Services, we give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

We are located in Oxnard, California. Contact us today by email (info@jttaxservices.com), telephone, or through our social media accounts on FacebookTwitter, and LinkedIn to schedule a consultation or to learn more about our services.