Are you prepared to file your 2020 taxes? Even if you use an accountant to file, you’ll have to gather your paperwork yourself, be aware of filing deadlines, and prepare for whatever you’ll owe (or will hopefully get a refund for). As federal tax codes continue to change each year being prepared is the front line of defense against unwanted tax audits and late filing.   

To begin, electronically document everything (and make sure you have a backup). Examples include:

• Scanning receipts into specific folders.
• Storing your electronic copies of your W2s, W9s, and more.
• Getting everything onto a spreadsheet if you aren’t already using tax or accounting software.

What to Know About Federal Taxes in 2020

This preparatory process can really help your accountant get a quick start on filing your taxes. When you show up, be organized and prepared. If you’re filing for yourself and your business, make sure to have your personal and professional paperwork entirely separated.   
We are now heading into year three of the Tax Cuts and Jobs Act. This means that standard deductions get adjusted yearly for inflation (even though wages are stagnant and falling behind in this area).  

Taxes in 2020 also encourage you to save money for retirement, and the amount you can put into an HSA (health savings account) increases as well.   

What to Know About New York State Taxes in 2020

Despite popular rumor, the “millionaires tax” in New York is extended through 2024, so income earners in that bracket shouldn’t count on the extra cash.   

Additionally, New York is becoming stricter on paying sales tax for personal property sales. You are required to submit taxes for all personal property sales, defined as “tangible goods.”  

How to Prepare Your Business for the 2020 Tax Season

If you’re filing for your business in 2020, make sure you have your income and expenses ready. You’ll also need information about your work location (even if it’s a room in your home), including square footage. Remember to include expenses and other monetary concerns such as:  

• Exact mileage
• Travel expenses
• Utilities
• Food and beverage (minus alcohol)
• Goods, such as office supplies
• Corporate holiday gifts
 
• Donations
• Wages paid out
• Cash income earned, and more
 

Often, accountants notice that small business owners in New York lack accountability for one or more of those areas. Missing this information means missing out on some potential tax breaks.   

As with personal taxes, it’ll often benefit your business more to take standard deductions (but not always). That’s why it’s important to have the exact facts and figures for your accountant.   

Will Tax Returns Be Bigger in 2020?

Returns won’t necessarily be bigger in 2020, but that increase in the standard personal tax deduction may give you and your family a bit of a boost. The best way to get a big tax refund involves meticulous accounting and making sure your accountant has everything they need to spot potential refunds.   

If you’ve had periods of unemployment, or if your business has taken losses, that’s important to include as well, and may result in some tax relief. Lastly, personal tax filers often forget about medical expenses. If you’re paying more than the standard deduction (which many people are), make sure to itemize your medical expenses for a potential refund.   

When Can You File 2020 Taxes?

Employers must postmark W-2s by January 31, 2019. You can begin filing in January 2020 via e-file. If you’re an employer, remember that you’re obligated to get those tax forms out by the end of January.   

It’s best to file as soon as possible. Avoid difficulty in scheduling with your accountant, get ahead of the game with errors, and get any potential refunds sooner. If you put any of your essential documents into storage, make sure you get them out of storage as soon as possible.    

Secure Your Documents with Storage Quarters

If you need to store, digitize, or securely destroy sensitive documents during tax season, call the information management specialists at Storage Quarters. Our experts can help you take your office digital in 2020, securely store documents in our cloud, and store hard copies of important papers. If you can’t come to our convenient Garden City location, we can come to you with our mobile shredding truck or drop off a destruction console for your office. We are here to help you protect yourself and your customers with a variety of document management solutions. Feel free to call us at (516) 794-7300 or email us by clicking here. We look forward to hearing from you!