Amid a whirlwind of unexpected and unprecedented events this past year, many people are scrambling to get their 2020 tax returns done by the May 17 extension as they bring their heads above the water.
CPA and TurboTax (INTU) - Get Intuit Inc. Report expert Lisa Greene-Lewis rattles through the things that many people forget to include when filing, and retirement contributions seem to be at the top of the list.
- Contribute to IRA before May 17 to make an impact on your tax return. You can contribute up to $6k and an additional $1k if you're 50 or older. Just make sure to tell the plan provider that it is a 2020 contribution.
- Contribute to HSA before May 17 for yourself or your family. You may be able to deduct that contribution for 2020 as well.
- If you're self-employed, contribute to SEP IRA before Oct. 15. You can contribute more to a SEP IRA than a traditional IRA, with 25% of your net income or up to $57k.
- Deduct for charitable contributions. If you contribute to charities year-round, make sure you have those acknowledgments and documentation whether you donated online or volunteered in person.
- If you drove to volunteer, you are able to deduct your mileage by $0.14 per mile.
- The charity must be a 501-C3 not-for-profit business in order for the IRS to take the deduction.
- If you're one of the 90% of people that now claim the standard deduction, you can also claim up to $300 in charitable contributions under the Cares Act on top of the standard deduction.
- Don't forget your reinvested dividends because that can lower the amount of gain that you're recognizing and that's taxable. You want to add your reinvested dividends to the cost of your stock that you sold or your transactions to lower your gain. That can be found on your 1099 from your broker.