When you get ready to file your federal tax return there are new things to consider when it comes to which credits to claim and what deductions to take. These things can affect the size of any refund you may receive. Do any of these apply to you?
Recovery rebate credit
Taxpayers may be able to claim the recovery rebate credit if they met the eligibility requirements in 2020 and one of the following applies to them:
- They didn’t receive an Economic Impact Payment in 2020.
- They are single and their payment was less than $1,200.
- They are married, filed jointly for 2018 or 2019 and their payment was less than $2,400.
- They didn’t receive $500 for each qualifying child.
Refund interest payment
People who received a federal tax refund in 2020 may have been paid interest. The IRS sent interest payments to individual taxpayers who timely filed their 2019 federal income tax returns and received refunds. If you received an interest payment (most were sent as separate payments) in 2020, look out for a Form 1099-INT, Interest Income to include with your filing.
New charitable deduction allowance
New this year, taxpayers who don’t itemize deductions can take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations.
All information shared in this article can be found directly on the IRS.gov website. Click here for more details.