2020 Tax Season Client Letter
2020 Tax Season
Unfortunately, 2020 has been a hard year for most of us, my sincere hope is that you and your family are safe and have weathered the storm. There are many changes to the tax law and I have attended many classes and seminars to make sure I understand the changes and can use them to minimize your tax liability.
On December 27, 2020, the President signed into law the Consolidated Appropriations Act, 2021. (CAA) The massive year-end package includes enhanced unemployment benefits, a new round of Paycheck Protection Program (PPP) lending, and dozens of provisions targeting businesses and nonprofit organizations that face pandemic-related challenges. Similarly, individuals received much needed stimulus and tax relief.
Stimulus Checks: If you did not qualify for a stimulus check based on your 2018 or 2019 taxes, you can claim the Recovery Rebate Credit if you are eligible based on your 2020 tax return. If you did not qualify for the second stimulus check based on your 2019 tax return, you can claim the Recovery Rebate Credit if you are eligible based on your 2020 tax return.
Help with Education Costs: More families will also receive help with education costs related to student loans, the Lifetime Learning Credit, Emergency Financial Aid grants , and educator tax breaks.
Net Operating Loss Carry Back: The CARES Act allows a five-year carryback for a business NOL that arises in a tax year beginning in 2018 through 2020.
EITC and Child Tax Credit: The new law provides a special rule for 2020: a taxpayer may elect to use their 2019 earned income amount (as opposed to 2020) to calculate their EITC and child tax credit benefits if their income dropped in 2020.
In addition to these, there are many retroactive tax credits and provisions that have been extended through 2021. Not all of the new changes will apply to your tax situation, but my staff and I will work with you to take advantage of every opportunity you are eligible for.
The first day to file this year is February 12th. The deadline for most businesses is March 15th and the deadline for personal income tax is April 15th.
Our goal is to keep you safe and your information secure. We will be implementing a new client portal called “Intuit Link” and want to provide many avenues for you to safely get your tax information to us.
As always, I understand that tax season is no fun, but I want to help make it as painless as possible.
Thank you so much for your business,
Denise Castro, CPA