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Get ready to file taxes: What to do before the tax year ends There are things taxpayers can do before the end of the year to help them get ready for the 2021 tax filing season. Below are a few of them. Donate to charity... There is still time to make a 2020 donation. Taxpayers who don't itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying charities. Cash donations include those made by check, credit card or debit card. Before making a donation, people can check the Tax Exempt Organization Search tool on IRS.gov to make sure the organization is eligible for tax-deductible donations. The Coronavirus Aid, Relief, and Economic Security Act changed this law. The CARES Act also temporarily suspends limits on charitable contributions and temporarily increases limits on contributions of food inventory. Report any name or address change Taxpayers who moved should notify the IRS of their new address. They should also notify the Social Security Administration of any name change. Renew expiring ITINs Certain Individual Taxpayer Identification Numbers expire at the end of this year. Taxpayers can visit the ITIN page on IRS.gov for more information on which numbers need renewal. Connect with the IRS Taxpayers can use social media to get the latest tax and filing tips from the IRS. The IRS shares information on things like tax changes, scam alerts, initiatives, tax products and taxpayer services. These social media tools are available in different languages, including English, Spanish and American Sign Language. Find information about retirement plans IRS.gov has end-of-year find tax information about retirement plans. This includes resources for individuals about retirement planning, contributions and withdrawals. The CARES Act retirement plan relief waived required minimum distributions during 2020 for IRA or retirement plan accounts. Also, eligible individuals can take a coronavirus-related distribution of up to $100,000 by December 30, 2020 and repay it over three years or pay the tax due over three years. Contribute salary deferral Taxpayers can make a salary deferral to a retirement plan. This helps maximize the tax credit available for eligible contributions. Taxpayers should make sure their total salary deferral contributions do not exceed the $19,500 limit for 2020. Think about tax refunds Taxpayers should be careful not to expect getting a refund by a certain date. This is especially true for those who plan to use their refund to make major purchases or pay bills. Just as each tax return is unique to the individual, so is each taxpayer's refund. Taxpayers can take steps now to get ready to file their federal tax return in 2021.

Here’s what taxpayers need to know about filing an amended tax return If taxpayers discover a mistake on their tax return, this is not necessarily cause for concern. Most errors can be fixed by filing a Form 1040-X, Amended U.S. Individual Income Tax Return. Here are some common reasons people may need to file an amended return: Entering income incorrectly... Not claiming credits for which they’re eligible Claiming deductions incorrectly The IRS may correct math or clerical errors on a return and may accept returns without certain required forms or schedules. In these instances, there's no need for taxpayers to amend the return. Taxpayers who do need to amend their tax return might have questions about how to do so. Here are some things they should know: Taxpayers may now use tax software to file an electronic Form 1040-X. At this time, only tax year 2019 Forms 1040 and 1040-SR returns can be amended electronically if the original 2019 tax return was also filed electronically. Taxpayers who cannot or chose not to file their 1040-X electronically should complete a paper Form 1040-X. If filing a paper 1040-X, mail it to the IRS address listed in the form’s instructions under Where to File. Taxpayers filing Form 1040-X in response to an IRS notice should mail it to the IRS address indicated on the notice. Attach copies of any forms or schedules affected by the change. File a separate Form 1040-X for each tax year. When mailing amended returns to the IRS, place each tax year in a separate envelope and enter the year of the original return being amended at the top of Form 1040-X. Wait if expecting a refund for the original tax return to be processed before filing an amended return. Pay additional tax owed as soon as possible to limit interest and penalty charges. Taxpayers should file Form 1040-X to claim a refund within three years from the date they timely filed their original tax return or within two years from the date they pay the tax, whichever is later. Track the status of an amended return three weeks after mailing using the Where’s My Amended Return? tool. See more

Business owners should visit IRS.gov for help with tax actions when closing a business Closing a business is always a difficult decision regardless of the circumstances. With this in mind, the IRS redesigned the closing a business page of IRS.gov to help business owners navigate the federal tax steps when closing a business. Small businesses and self-employed taxpayers will find a variety of information on the page including: What forms to file How to report revenue rec...eived in the final year of business How to report expenses incurred before closure The page also details steps all business owners should take when closing. File a final tax return and related forms. The type of return to file and related forms depends on the type of business. Take care of employees. Business owners with one or more employees must pay any final wages or compensation, make final federal tax deposits and report employment taxes. Pay taxes owed. Even if the business closes now, tax payments may be due next filing season. Report payments to contract workers. Businesses that pay contractors at least $600 for services including parts and materials during the calendar year in which they go out of business, must report those payments. Cancel EIN and close IRS business account. Business owners should notify the IRS so they can to close the IRS business account. Keep business records. How long a business needs to keep records depends on what's recorded in each document. The page also provides helpful information for business owners declaring bankruptcy, selling their business and terminating retirement plans. https://go.usa.gov/xG6VY

Tips for taxpayers who need to file an amended tax return The IRS will correct common errors during processing. However, there are certain situations in which a taxpayer may need to file an amended return to make a correction. Taxpayers can now file some amended electronically. Here are some tips for anyone who discovered they made a mistake or forgot to include something on their tax return. Use the Interactive Tax Assistant. Taxpayers can use the Should I file an amended r...Continue reading

YOUNG PEOPLE: Buy a house and get a 15 year fixed mortgage rather than a 30 year mortgage. Saves a lot of money in interest over the life of the loan. If you must get the 30 year mortgage verify no prepayment penalty. This gives you the flexibility of paying off early if you are able. But also gives the option of making lower payments when times are tough. When you start your job, get an HSA account not FSA and get the high deductible health insurance. It will lower your tax ...bracket and the money is yours to use. You also earn 40% in most cases after 10k!!! Never buy a car brand new! I’ve watched Escalades go from 100k (new) to 35k four years later. Get you an LLC (incorporate your name!!) and run it as an S Corp. Remember Jay-Z quote I’m not a Businessman I’m a Business Maaaaaaaan.... let that sink in. Build business credit! The loans are bigger and the interest rate is lower. Get a business bank account (in most cases this costs around $500 to start). Some people got two stimulus checks (one from Trump and one from the SBA). Also no fees. Get with your peers from your graduating class and others together at homecoming on one day for two hours to plot and strategize how we can move our communities forward (commerce, politics, education, etc...) Get life insurance for you and your children (term) as soon as they are born (one thing is for sure is we will die...might as well leave your kids something extra!). The sooner you get it, the cheaper it is. Get the people in your immediate family to save collectively! If 10 people save $500/month, that’s 60k every year. You could buy 3 starter homes every year and in 4 years all ten of you are home owners. Buy on the same block or neighborhood if you can...this way you control the value of the homes (remember Monopoly!). Learn how to create a wealth portfolio and acquire hard assets like the wealthy do. See more