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A Complete Guide to Understanding Your 2020 Taxes
by Leslie Quander Wooldridge
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April 2, 2020

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A Complete Guide to Understanding Your 2020 Taxes

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No matter our relationship status — single, dating, married, and more — one thing is constant, which is our taxes. We have to pay them. Year after year. After year. But while their presence is typical, there are some changes this tax season, primarily due to the new $2 trillion relief plan to help people affected by the COVID-19 pandemic. 

In the third edition of My Fab Finance’s webinar series organized by Tonya Rapley, the millennial entrepreneur held a conversation with business manager Belva Anakwenze to discuss everything you need to know about understanding your taxes this season. And I’m bringing all of the highlights from the conversation and related information right here to BlackLove.com. Besides, the last thing we want you to worry about is having tax trouble when this is all over. There’s enough to deal with already. Wouldn’t you agree? 

Emergency relief and paycheck protection from the Small Business Administration (SBA) are being offered for those affected by the COVID-19 pandemic.

Belva Anakwenze of Abacus Financial Business Management (Photo courtesy of Belva Anakwenze)
Belva Anakwenze of Abacus Financial Business Management (Photo courtesy of Belva Anakwenze)

The speakers for the third installment of the Leveling Up In Uncertainty webinar series were, of course, Tonya Rapley alongside Belva Anakwenze. Tonya is an entrepreneur and the creator behind My Fab Finance, who seeks to help millennials “break the cycle of living paycheck to paycheck so they can become financially free and do more of what they love.”

Belva is principal of Abacus Financial Business Management, a minority and female-owned boutique business management firm located in Los Angeles, California. For more than 20 years, she has handled the day-to-day financial affairs for creatives, entertainers, and corporate executives by offering virtual CFO services, accounting and bookkeeping, payroll and tax preparation, and nonprofit management. Both women provided a diverse range of sources, essential advice, and resources to help you better navigate this 2020 tax season and beyond. Check out a few of the highlights below! 

Related: Money Expert Tonya Rapley on How to Survive and Thrive in an Economic Crisis

Tax changes.

During the conversation, Anakwenze noted the most significant change this tax year is the deadline to file federal taxes for 2019. Last month, the Treasury Department and Internal Revenue Service announced: “the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.” That means “taxpayers can also defer federal income tax payments as well without penalties and interest, regardless of the amount owed.” Per the official press release, this change applies to all taxpayers.

Although many states have announced an extension, if your state has income taxes, I highly suggest you check on whether local filing deadlines also have changed in your area. Anakwenze says, if you make estimated quarterly payments or are self-employed, then your first payment would be due on April 15. But now, your first and second payments aren’t due until June 15 as indicated on the official website of the IRS.

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Stimulus payments. 

In general, individuals who have a Social Security number and an adjusted gross annual income (per 2018 or 2019 taxes) of less than $75,000, should receive the full amount of $1,200, with this sum decreasing until it stops for single people making more than $99,000. There’s also an additional payment of $500 for each qualifying child 16 years old or under. However, there are a few restrictions. Figures also change for married couples and for those who file as head of household. 

Anakwenze said this payment is considered an advance on a tax credit for 2020. If you’re eligible for the credit, and the IRS has your bank info via your 2018 or 2019 returns, you’ll receive the deposit automatically — based on the tax figures the IRS already has on file. If the IRS doesn’t have your bank info, and you’ve moved, Anakwenze advises that you should complete the IRS change of address form by visiting www.irs.gov

Related: Money Management: Leveling up in Uncertainty

Unemployment and taxes.

If you’ve lost your job due to the pandemic, both presenters, Tonya and Belva, advise filing for unemployment. As always, the funds you receive will be taxable, but now former employees and independent contractors can also qualify for help. 

If you’re a freelancer or contractor who worked gig to gig this year, Anakwenze said to track your expenses for tax purposes. This includes gas (if you’re driving for work), supplies, and much more. Another rule of thumb to keep in mind is to create a plan that involves setting aside funds for quarterly tax payments, as mentioned earlier. 

Small business loans. 

Our final topic of discussion was small business loans. According to Anakwenze, emergency relief and paycheck protection from the Small Business Administration (SBA) are being offered for those affected by the COVID-19 pandemic. Per the SBA, paycheck protection authorizes “up to $349 billion toward job retention and certain other expenses.” For further details and how to apply, please visit www.sba.gov.

Personally speaking, we all know, taxes can be complicated, and this pandemic is unfortunately evolving and affecting our daily lives in numerous ways. If you have questions about your specific money or work situation, please consult a tax professional for advice. 

Created by nationally recognized millennial money expert Tonya Rapley, My Fab Finance is a leading financial education and lifestyle blog for millennials who want to become financially free and do more of what they love.

Disclaimer: BlackLove.com does not offer any financial advice, and the views and opinions expressed in this article are the author’s viewpoints and opinions.

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