Changes To Expect When Filing Your 2020 Tax Return
For many Americans, 2020 has brought on a whirlwind of uncertainty, especially from a financial perspective. Fortunately, the government has recognized the challenges they are facing and has introduced some changes to support them. Many of these changes are related to tax benefits as they are designed to help you save more.
At Cortes & Baker, LLC, we are aware of all the latest financial changes introduced by the government and how they can impact you as an individual or business. As accounting and tax specialists, it is our job to be aware of these details. To enlighten you about the latest tax-related modifications by the government, our experts have listed two major changes to expect when filing your 2020 tax return.
1. New retirement plan rules
Under the modified rules, certain taxpayers are permitted to withdraw up to $100,000 from a retirement plan or IRA for “coronavirus-related distributions” without incurring the 10% premature distribution penalty. If the taxpayer chooses, they may at any time during the three years beginning on the day after the date such distribution from a qualified retirement plan was received, make one or more contributions in an aggregate amount not to exceed the amount of the distribution to an eligible retirement plan or IRA and treat the contribution as a rollover contribution. The required minimum distribution (RMD) age increased from seventy and a half to seventy-two years. RMDs required to be made, or that begin in 2020 are waived.
2. Ability to deduct donations without itemizing
A charitable contribution not in excess of $300 made in taxable years beginning in 2020 is allowed to taxpayers who do not itemize. For this benefit, the donation must be made in cash to a qualified charitable organization.
For more information on what to expect while filing your 2020 tax returns, reach out to us at Cortes & Baker, LLC. We are an accounting firm in Columbus, Ohio, catering to the needs of individuals and businesses of all sizes. We specialize in accounting, bookkeeping, and tax preparation services. We are dedicated to our clients and have bilingual staff that can help our clients all year round with their financial needs.