Cypress Wealth Services
Tax season can be stressful and frustrating even in the best of times; factor in a year full of uncertainty and you could have a recipe for disaster. We’re here to help! First and foremost, let’s get organized. As your tax documents begin to arrive in your inbox and your mailbox, keep this comprehensive tax-preparation checklist on hand. The better prepared you are, the sooner you can shake off the stress of taxes and get back to doing what you love instead.
Instead of letting your tax documents pile up on your counter or get lost in your inbox, create an organized system for the following:
If you want your tax-filing experience to be painless, you’ll also want to make sure that you have all of your and your dependents’ personal information available, such as:
Also, if you itemize your deductions, you’ll need records to include your totals and provide proof.
Consider Possible Changes
Okay, so that’s the nitty-gritty of what you’ll need in front of you to thoroughly fill out your tax return. But there are also a few things to think about that could impact how you file, such as any changes that have occurred this year. Did you add another child to your family? Did one of your children start college? Did you start taking withdrawals from a retirement account? All of these changes need to be reflected on your tax return but won’t show up on prior returns.
More than personal changes, there may be changes to federal or state tax law that you should be aware of. The Tax Cuts and Jobs Act tax reform bill of 2017 is still being implemented, and the new SECURE Act could also affect your 2020 tax situation.
Specifically, you should stay on top of annual changes to retirement plan contribution limits. For the 2020 tax year, you can put up to $6,000 in any type of IRA. If you are over age 50, that amount goes up to $7,000 thanks to the $1,000 catch-up contribution. Annual contribution limits for 401(k)s, 403(b)s, the federal Thrift Savings Plan, and most 457 plans also increased by $500 for 2020. The new annual limit on contributions is $19,500. If you are 50 or older, your yearly contribution limit goes up to $26,000. And if you are eligible to contribute to an HSA, you can save $3,550 if you have single medical coverage and $7,100 if you are covered under a qualifying family plan. If you are 55 or older, those limits go up another $1,000. Keep in mind that for IRAs and HSAs, you have until April 15th, 2021, to contribute for the 2020 tax year.
A knowledgeable financial professional can help you understand any tax law changes and how they affect you.
Tax season is a stressful time of year that we’re happy to help you through. But we want to do more! We can work with you to create a customized, detailed blueprint of what you need to do in order to meet your long-term financial goals. Are you optimizing all of the tools available to you to limit your tax liability? Are there steps that you could take now to minimize future taxes? Do you have a plan for your tax refund that will further your overall financial goals?
We would love to bring clarity and confidence to your financial life. Working with an experienced tax professional who understands the unique challenges presented during tax season can help maximize the available opportunities. Together, we can work toward your overall financial plan and optimize all of the tools available to you to limit your tax liability.
If you want to be proactive about tax planning and you don’t have a trusted advisor yet, we would love to help you experience confidence in every aspect of your financial plan. Call our office today at 760.834.7250 for your complimentary consultation or contact one of our offices to get started!
Cypress Wealth Services is an independent RIA firm providing financial planning and investment management to high net worth individuals, families, business owners, and institutions. Cypress Wealth Services comprises professionals with diverse backgrounds and extensive experience and qualifications. Cypress Wealth Services is uniquely qualified to serve a broad range of client needs, and their experience and expertise act as a foundation for their client service process. The firm uses The Second Growth, which focuses on efficiently protecting, growing, and transferring to their loved ones the wealth and legacy a person has already built. With financial advisors in Palm Desert, CA, Tustin, CA, and Anchorage, AK, the firm serves clients across the country in Wealth Management Services, Fiduciary Services, 401(k) Design and Management, Investment Reporting Services, Financial and Retirement Planning, and more. For more information, visit www.CypressWS.com or call 760.834.7250.
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. You should discuss your specific situation with the appropriate professional. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.