MarketplaceTaxes

Actions

Tax Time: Americans have plenty of questions, Bakersfield tax preparers lend some answers

Tax season is officially upon us.
Tax Season Guide
Posted at 11:03 PM, Feb 16, 2021
and last updated 2021-02-17 12:15:01-05

BAKERSFIELD, Calif. (KERO) — Tax season is officially upon us and this past week the IRS started accepting and processing 2020 tax year returns, however, millions of Americans are still looking for answers.

In a normal year, filing taxes can be a daunting process, but now with all the added variables due to the pandemic, this raises questions among tax-payers, so local CPAs break down everything you need to know.

“It's important to have a good relationship and communication with your tax preparer anytime there are changes like this, you want to make sure you're well informed because unemployment, for example, can completely change your tax situation, same with gain or loses from the sales of stocks and obviously stimulus checks,” said Joel Sandoval with Sandoval Tax CPAs.

Joel Sandoval with Sandoval Tax CPAs says it's important to stay in touch with your tax preparer all year long, to avoid those expensive surprises come tax season. And this seems to be the case for many, according to Al Afrouzian, another local preparer. "What I've been getting a lot of calls on and you know emails, regarding the stimulus checks whether or not they are taxable or unemployment,” said Afrouzian. And while the stimulus checks are not taxable, they still need to be filed. He adds, “In professional tax software that the accountants deal with, there's an area that when were preparing their 2020 tax return, we have to answer how much it was and when they received it.”

If you did not receive a stimulus check, but still qualified for it, Sandoval says you're in luck.
“If they did not receive their stimulus we can actually request a credit on their tax return so that way they're able to get that stimulus amount on their actual return.”

While these checks are non-taxed, this isn't the case for unemployment benefits. “Hopefully most taxpayers claimed the box that had federal taxes withheld because unemployment benefits are taxable.“

Sandoval says if you did not follow the process correctly when originally signing up for benefits with the EDD, then you could owe money.

“The refunds are usually smaller or they end up having to pay tax which completely changes their situation.”

While unemployment was at an all-time high in 2020, the stock market was also making headlines. Which Sandoval says is another factor to consider when preparing your taxes.

“That 1099 would report the losses and those losses help you technically pay less in taxes or get a better refund, depending on your situation, if you had a gain though, it would be the complete opposite, you'd have to pay taxes on the profit that you made.”

So prior to your tax appointment, preparers ask to have all paperwork on hand.

The deadline to file your taxes is April 15. Now, if you miss that deadline you may have the opportunity to file an extension which will give you an additional six months to file, but keep in mind, Sandoval says if you do owe taxes this will not give you additional time to pay.

If you need the forms to file your unemployment benefits, visit the EDD website.

Bakersfield Christmas Parade

Kern's Kindness

NEW TAX LAW

If you’re wondering how you’re affected, not to worry, we have your back. We’re doing the work to make sure our products are up to date and that you can use them to file your taxes with complete confidence.

That said, many folks are wondering what’s in the bill and how it might affect them. Here’s a recap of some of the major tax provisions in the new tax bill and how they may impact you.

Increased Standard Deduction: The new tax law nearly doubles the standard deduction amount. Single taxpayers will see their standard deductions jump from $6,350 for 2017 taxes to $12,000 for 2018 taxes (the ones you file in 2019). Married couples filing jointly see an increase from $12,700 to $24,000. These increases mean that fewer people will have to itemize. Today, roughly 30% of taxpayers itemize. Under the new law, this percentage is expected to decrease.

Increased Child Tax Credit: For, families with children the Child Tax Credit is doubled from $1,000 per child to $2,000. In addition, the amount that is refundable grows from $1,100 to $1,400. The bill also adds a new, non-refundable credit of $500 for dependents other than children. Finally, it raises the income threshold at which these benefits phase out from $110,000 for a married couple to $400,000.

Personal and Dependent Exemptions: The bill eliminates the personal and dependent exemptions which were $4,050 for 2017 and increased to $4,150 in 2018. State and local taxes/Home mortgages: The bill limits the amount of state and local property, income, and sales taxes that can be deducted to $10,000. In the past, these taxes have generally been fully tax deductible. The bill also caps the amount of mortgage indebtedness on new home purchases on which interest can be deducted at $750,000 down from $1,000,000 in current law.

Health Care: The bill eliminates the tax penalty for not having health insurance after December 31, 2018. It also temporarily lowers the floor above which out-of-pocket medical expenses can be deducted from the current law floor of 10% to 7.5% for 2017 and 2018. So for 2018, you can deduct medical expenses that are more than 7.5% of your adjusted gross income as opposed to the higher 10%.

Fastax Has You Covered

Don’t worry about memorizing these tax changes the majority of which are for 2018 taxes that you file in 2019. Fastax has you covered and will be up to date with the latest tax laws. Call us for tax help at 661 493-8512