By Jeffrey R. Wolfe, Senior Vice President and Manager of Wealth Planning Strategies
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As you continue to labor through quarantines, virtual meetings and the like, there’s another uplifting time of year approaching: tax season! Once again, most of the tax laws have remained consistent this year. One big change – another COVID-19 casualty – is that the IRS delayed the official start of tax season this year. The IRS will not begin accepting returns until February 12, one of the latest starting dates in recent memory.
Other than indexing, the primary tax rules remain unchanged. The 2020 tax year standard deductions are $12,400 for single filers, $24,800 for married filing joint filers. The state and local tax deductions remain limited to $10,000 regardless of filing status, meaning the vast majority of taxpayers will not itemize their tax returns.
While tax laws haven’t changed, we do have a new administration in the White House. It’s important to remember that the new administration will not affect your 2020 tax return. That said, with a Democratic House of Representatives and an evenly split Senate, it is possible that taxes may come to the forefront of political debate in 2021. Accordingly, our weekly blog series will touch on possible proposals or rhetoric this year with the caveat that our crystal ball is broken, and we have no idea what the future may bring.
Look for new topics every Tuesday until tax season ends, and remember your financial advisor is happy to work with you and your tax advisor to make filing your taxes as painless as possible. Happy Tax Season!