Tax Season: Tips For Filing Your Taxes In 2021

If you haven’t filed your taxes yet, you still have time. On March 17, 2021 the IRS published a news release announcing they have extended the filing and payment tax deadline for individuals from April 15, 2021 to May 17, 2021. Due to 2020 being a different and unusual year for many, there may be some changes to your taxes this year.

Here are some things to consider of when you are filing your taxes this year.

1. Unemployment benefits
As you know, the pandemic forced many businesses to shut their doors and change the way they operate. As restrictions were put in place, many individuals were left unemployed and as a result, started taking unemployment benefits. The unemployment benefits are taxable on federal taxes, however, state laws can differ on this matter. If you received Form 1099-G, this form indicates that your unemployment benefits have been paid. Be sure that you report all paid and unpaid unemployment benefits on your taxes.

Learn more about tax terms and other tax forms by reading Let’s Talk Taxes.

2. Remote work
Another big change in 2020 was the transition of in-office working environments to remote working environments. While many employees worked from home in 2020, only self-employed individuals, such as an independent contractor, are permitted to take a write-off or deduction on business-related expenses. If you worked in an office and worked remotely in different states, your taxes may differ at the state level.

3. Rebate credits
With many Americans feeling the financial impacts of the pandemic, two stimulus payments were issued to Americans in 2020. Though these payments aren’t taxable, you will still be asked to verify if you received these payments on your taxes. If you didn’t receive one or both of the stimulus payments, make sure this is indicated in your taxes. The amount you should have received will be added to your tax return.

4. Submitting your tax return
The IRS urges filers to submit their taxes electronically. Returns submitted electronically will be received and processed faster than returns that are mailed in. Additionally, if you are eligible for a refund, you’ll receive the funds faster if you opt in for a direct deposit of your funds in your First Bank Checking or Savings account versus a mailed check.

As you prepare to file your taxes, be mindful of any changes that took place in 2020 and how they might impact your taxes. The First Bank Wealth Management team can assist you with advanced, up-to-date knowledge in tax law and can help you understand how tax law changes could affect your finances. Learn more about our Tax Planning Services.

As always, consult with a certified tax professional for this year's tax guidelines and rules.