2020 Taxes

[cyfan92]

So we had a baby born in the summer of 2020. We did not receive any stimulus money from the 2nd round qualifying dependent because he wasn't claimed on our 2019 return.

We have received the max amounts for all of the prior stimulus as we were under the joint limit for 2019 AGI. Do to job promotions, pay increases and bonuses our 2020 AGI would not qualify us for the 3rd stimulus check.

My question is that Turbo Tax says I am ineligible for the $600 stimulus that was paid out for the 2nd row to qualifying dependents. Is this correct? Our 2019 income would have qualified for the credit. If you use 2019 AGI, we should receive the full amount. Do I need to reach to Turbo Tax or the IRS?

EDIT: If you select lived with you the entire year on TuboTax. You are credited the missed stimulus

 

[brianhos]

So we had a baby born in the summer of 2020. We did not receive any stimulus money from the 2nd round qualifying dependent because he wasn't claimed on our 2019 return.

We have received the max amounts for all of the prior stimulus as we were under the joint limit for 2019 AGI. Do to job promotions, pay increases and bonuses our 2020 AGI would not qualify us for the 3rd stimulus check.

My question is that Turbo Tax says I am ineligible for the $600 stimulus that was paid out for the 2nd row to qualifying dependents. Is this correct? Our 2019 income would have qualified for the credit. If you use 2019 AGI, we should receive the full amount. Do I need to reach to Turbo Tax or the IRS?

Get an accountant to handle this. I pay $300 for all my tax work, it is the best $$ I spend all year. And then when I have questions, I just send him an email and ask. Saved me thousands in taxes around an inherited IRA. So paid for himself for the next 10 years already.

 

[Agclone91]

Stupid and probably simple question for our resident CPA's.

Wife and I closed on our first house in July (were renting previously). We have an escrow account. Going to include fake numbers for the sake of math.

We "paid" $1500 at closing (shows as a debit in the "impound" section of closing documents) into escrow for property taxes. We also got our 1098 that shows $1000 of property taxes paid.

When claiming Property Taxes Paid for the year, do I claim the amount we paid into escrow + the amount on the 1098 ($2,500), or just the amount on the 1098 ($1,000)? I've read quite a few places online that you can claim property taxes paid at closing, but the fact that we technically paid that amount into escrow is what's throwing me off.

 

[mynameisjonas]

Stupid and probably simple question for our resident CPA's.

Wife and I closed on our first house in July (were renting previously). We have an escrow account. Going to include fake numbers for the sake of math.

We "paid" $1500 at closing (shows as a debit in the "impound" section of closing documents) into escrow for property taxes. We also got our 1098 that shows $1000 of property taxes paid.

When claiming Property Taxes Paid for the year, do I claim the amount we paid into escrow + the amount on the 1098 ($2,500), or just the amount on the 1098 ($1,000)? I've read quite a few places online that you can claim property taxes paid at closing, but the fact that we technically paid that amount into escrow is what's throwing me off.

You claim both amounts. Get a copy of. both documents to your cpa.

There is also prepaid interest on your closing disclosure that isn’t included on your 1098 that is also deductible.

also any origination points you paid should be deductible.

EDIT: Now that I think about it.....that is weird since if you closed in July the only time property taxes would be paid is September. (If in iowa) So not sure why there is a discrepancy, but the total amount you would let your cpa know about is the total amount that was due in September.

(I’m not a cpa)

 

[Agclone91]

You claim both amounts. Get a copy of. both documents to your cpa.

There is also prepaid interest on your closing disclosure that isn’t included on your 1098 that is also deductible.

also any origination points you paid should be deductible.

EDIT: Now that I think about it.....that is weird since if you closed in July the only time property taxes would be paid is September. (If in iowa) So not sure why there is a discrepancy, but the total amount you would let your cpa know about is the total amount that was due in September.

(I’m not a cpa)

Currently don't have a CPA (Hence why I'm asking for cheap, high quality advice on CF). Our taxes have always been pretty straight forward so I've done them myself.

The amount on my 1098 matches the actual amount due in September which is what is causing my confusion as well. I know that the amount paid into escrow at closing is technically a "pre-pay" to build a balance in the account, I'm just not entirely sure if that is also deductible.

 

[Dopey]

Anyone got their Iowa return yet? I got my fed return on 10-Feb I believe. Still nothing from IA.

 

[mynameisjonas]

Currently don't have a CPA (Hence why I'm asking for cheap, high quality advice on CF). Our taxes have always been pretty straight forward so I've done them myself.

The amount on my 1098 matches the actual amount due in September which is what is causing my confusion as well. I know that the amount paid into escrow at closing is technically a "pre-pay" to build a balance in the account, I'm just not entirely sure if that is also deductible.

The impound section is probably your escrows so I think you stick with the 1098. (Non cpa opinion)

You are correct that escrows are not deductible.

 

[brianhos]

Anyone got their Iowa return yet? I got my fed return on 10-Feb I believe. Still nothing from IA.

Won't file them till April 15 or is it May this year?

 

[Trice]

Currently don't have a CPA (Hence why I'm asking for cheap, high quality advice on CF). Our taxes have always been pretty straight forward so I've done them myself.

The amount on my 1098 matches the actual amount due in September which is what is causing my confusion as well. I know that the amount paid into escrow at closing is technically a "pre-pay" to build a balance in the account, I'm just not entirely sure if that is also deductible.

I know under normal circumstances you can only deduct that which was actually paid to your county for taxes, and not what was paid into escrow. And I'm reasonably sure that applies to closing on a new home as well.

Earlier when you referenced having read about claiming property taxes at closing...any chance that was referencing paying property taxes at closing on a home you sold? Because in that scenario you are catching up on property taxes (that are usually paid a year behind) and I think you can deduct those. But since you're only buying in this situation, that wouldn't apply to you.

I'm not a CPA and I'm just going from memory, so wait for smarter people than me to answer.

 

[Rabbuk]

Anyone got their Iowa return yet? I got my fed return on 10-Feb I believe. Still nothing from IA.

I filed end of February and have fed back and waiting on state still. Iowa.

 

[Agclone91]

I know under normal circumstances you can only deduct that which was actually paid to your county for taxes, and not what was paid into escrow. And I'm reasonably sure that applies to closing on a new home as well.

Earlier when you referenced having read about claiming property taxes at closing...any chance that was referencing paying property taxes at closing on a home you sold? Because in that scenario you are catching up on property taxes (that are usually paid a year behind) and I think you can deduct those. But since you're only buying in this situation, that wouldn't apply to you.

I'm not a CPA and I'm just going from memory, so wait for smarter people than me to answer.

Could be. I'm likely overthinking it.

In reality, it probably doesn't matter because I doubt we will have enough itemizations to outweigh the standard deduction.

 

[IcSyU]

Word of advice for those with kid(s) in daycare who have dependent care FSAs....check with your HR department to see if they're amending the plan to change the limit from $5,000 to $10,500 in accordance with the American Rescue Plan. If they are and you spend that much on daycare max it out so you get those dollars all pre-tax.

 

[DSMCy]

Word of advice for those with kid(s) in daycare who have dependent care FSAs....check with your HR department to see if they're amending the plan to change the limit from $5,000 to $10,500 in accordance with the American Rescue Plan. If they are and you spend that much on daycare max it out so you get those dollars all pre-tax.

Wow thank you. Emailing HR first thing Monday.

Maybe there is something, but they need to put out a cheat sheet for these massive bills.

 

[3TrueFans]

Anyone got their Iowa return yet? I got my fed return on 10-Feb I believe. Still nothing from IA.

Same, nothing from state yet.

 

[Trice]

Could be. I'm likely overthinking it.

In reality, it probably doesn't matter because I doubt we will have enough itemizations to outweigh the standard deduction.

That was my other question, though it's quite possible you'd take the standard deduction on federal taxes and still itemize for Iowa.

 

[cyfan92]

Word of advice for those with kid(s) in daycare who have dependent care FSAs....check with your HR department to see if they're amending the plan to change the limit from $5,000 to $10,500 in accordance with the American Rescue Plan. If they are and you spend that much on daycare max it out so you get those dollars all pre-tax.

How is this the first I'm hearing about an item this big?? Thanks for the heads up. I'm also emailing HR on Monday

 

[ENGR 79]

I've dug into tax prep in the last few days, and what better way to celebrate than to start a new thread. Looks like both the IRS and Iowa state government begin accepting 2020 tax returns on February 12.

One notable change from the past few years is that the CARES Act from last spring created a $300 above-the-line deduction for charitable contributions even if you take the standard deduction. I tried numerous times to confirm that 1) this deduction would double to $600 for married couples, and 2) whether this was permanent or for 2020 only. On both counts I got conflicting information throughout the year. But the new 1040 instruction book makes it clear: $300 is the maximum whether you are an individual or couple for 2020.

But good news: the Consolidated Appropriations Act of 2021, probably better known as the stimulus bill Congress passed and Trump signed just after Christmas, includes this same deduction for tax year 2021 and this time doubles it to $600 for married couples filing jointly. Again, I'm seeing conflicting reports about whether this deduction will be permanent. It seems pretty clear to me reading the language of the bill that it will be permanent, but numerous sources report simply that this applies to 2021 and will not be any more specific or go any further than that.

Also a question for tax experts: each year I download all the pertinent tax forms and publications for that year for archival purposes, in case I need to research something later. It's a time-consuming PITA downloading and saving like 50 PDFs and I'm wondering if there's a better way. Even if there's some web site where I could just batch download them would go a long way. Any suggestions?

Happy filing.

You probably figured this out by now, but the charitable contribution limit for non-itemizers is $300 per return for all filing statuses except married filing separately, so even married filing jointly is limited to $300.

 

[Trice]

You probably figured this out by now, but the charitable contribution limit for non-itemizers is $300 per return for all filing statuses except married filing separately, so even married filing jointly is limited to $300.

Yep. And it goes up to $600 for tax year 2021. It's still not definitive, at least based on what I've read, whether it is permanent beyond that, though.

 

[IcSyU]

Yep. And it goes up to $600 for tax year 2021. It's still not definitive, at least based on what I've read, whether it is permanent beyond that, though.

At this point it's not permanent.

 

[NWICY]

I am encouraging my clients to still get them done by 4/15.

Get them out of the way for racing season.