New things taxpayers should consider as you get ready to file taxes in 2021
Here are some new key things people should consider when filing their 2020 tax return:
1. Recovery rebate credit: If you did not receive Economic Impact Payment in 2020
2. Single and received less than $1200
3. Married, filing jointly for 2018 or 2019 and their payment was less than $2400
4. They did not receive $500 for each qualifying child
Refund interest payment: People who received a federal tax refund in 2020 may have been paid interest. Most interest payments were received separately from tax refunds. Interest payments are taxable. In January 2021, the IRS will send a form 1099-INT, Interest Income to anyone who received at least $10 interest.
New charitable deduction allowance: New this year taxpayers who don’t itemize deductions can take a charitable deduction of up to $300 for cash contributions made to a qualifying organization.
Other refund-related reminders- Taxpayer’s should not rely on receiving a refund by a certain date. Some tax returns may require additional review and processing may take longer.
Refunds for taxpayers claiming the earned income tax credit or additional child tax credit can’t be issued before mid-February. This applies to the entire refund, not just the portion associated with the credit.