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Optima Tax Relief Reviews What Taxpayers Need to Do in Order to File Their Taxes Accurately

Taxpayers should start organizing their tax records now in order to avoid making mistakes when filing their 2020 federal tax return.

Optima Tax Relief reviews all the necessary records, such as W-2s, 1099s, receipts, canceled checks and other documents that support an item of income, or a deduction or credit appearing on a tax return.

Tax documents to collect

Individuals should begin to develop an organization system that will help keep all their most important information together. This could mean using a software program for electronic records or a file cabinet to keep paper documents in. Whichever method you choose to organize your documents, just make sure that your documents are readily available when you are ready to file your taxes.

In order to avoid any refund delays, taxpayers should gather all of their year-end income documents so that their tax return is filed accurately. Here are some income documents taxpayers can expect to receive for their 2020 taxes:

  • Forms W-2, Wage and Tax Statement.
  • Form 1099-MISC, Miscellaneous Income.
  • Form 1099-INT, Interest Income.
  • Form 1099-NEC, Nonemployee Compensation.
  • Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund.
  • Form 1095-A, Health Insurance Marketplace Statements.

Unemployment compensation

Americans who received unemployment compensation in 2020 need to be aware that this compensation is considered taxable and must also be included as gross income on their tax return.

Taxpayers can expect to receive Form 1099-G which will reflect the total amount of unemployment income that that they have earned throughout the tax year. Taxpayers also have the option to elect to have federal taxes withheld from their unemployment benefits or they can choose to make estimated tax payments throughout the year. For those who do not pay any taxes on their unemployment compensation, they may receive a tax bill after filing their 2020 federal taxes.

Individuals who received a Form 1099-G for unemployment compensation that they failed to receive, should contact their state agency and request that their Form 1099-G is corrected.

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