Tax experts discuss advantages of giving, filing early
WICHITA, Kan. (KWCH) - Three weeks out from ringing in a New Year, you still have time to give to charities whose needs are amplified through the holiday season. You also have time to set aside money that you may owe to Uncle Sam. Tax experts say there’s good news if you’ve able to give and if you received stimulus money earlier this year.
“Good news, (stimulus) money is not taxable. What that money was, was an advanced payment of a tax credit you’ll claim on your 2020 taxes,” Market Tax Services Certified Public Accountant Joshua Cicora said.
It’s different for unemployment benefits, which are taxable.
“Unfortunately, a lot of people don’t realize that,” Cicora said. “Of the people I’ve been dealing with, only a handful were able to set up withholdings on those to pay for the federal taxes.”
One way to save on your tax returns is by giving to those in need.
“Especially in this pandemic year, donations are a bit down,” said United Way of the Plains CEO Pete Najera. “We understand why, but the need is greater than ever.”
The United Way of the Plains sent out a letter reminding people of a unique tax advantage for 2020. Since most people take standard deductions, this year only, you’ll be able to deduct charitable contributions up to $300 for individuals and $600 for couples.
“We encourage everybody to give to their favorite nonprofit, but particularly this year with the tax advantages that were given to every American through the CARES Act,” Najera said. “So it’s just another incentive to give to your favorite nonprofit like the United Way.”
Tax preparers say there are three things you should be doing.
“Be organized, make sure you do the things you want to do, the charitable giving and retirement contributions as we close out the year, and get started early,” Cicora said.
The United Way helps people with low to moderate incomes prepare tax returns for free. You can call 211 to learn more.
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