A Challenging Tax Year

Another tax year is in the books and what a year is was! Preparing to file income taxes is likely to be more challenging this year with all the changes.

• For starters, many Americans’ personal situation have changed due to the pandemic. For example, those who collected unemployment compensation should receive a Form 1099-G from the state. Both federal and state unemployment compensation is taxable as ordinary income. Sadly, COVID took many lives and that may have an impact on a spouse’s tax return.


• Business owners that took advantage of government aid need to demonstrate compliance. Also, losses due to temporary or permanent closures may create entirely different tax scenarios.


• Congress passed many tax changes for 2020, most designed to help save taxpayers money. These changes are too numerous to detail here, but the takeaway is that this year, you’ll want to consult your tax professional for assistance with filing your taxes so you get the best possible results.


• Meanwhile, some rules remain the same. Remember, you have until April 15, 2021 to make potentially deductible contributions to your IRA for 2020. You can contribute $6,000 if you’re under 50 and $7,000 if you’re 50 or over for 2020.