Three Ways to Weather the 2020 Tax Season
Over half of U.S. adults say financial stress negatively
impacted their personal health and work performance in 2018,
according to new research from Lincoln Financial Group. When
it comes to tax season, preparation is key to easing
anxiety, according to experts.
“Tax season can be stressful for many people, but it’s also
an opportunity to strengthen your financial plan,” says
Michael Corr, chief estate and business planning strategist,
Lincoln Financial Advisors, National Planning Team. “The
good news is that there are some simple ways to manage the
To weather the 2020 tax season, Corr offers these tips:
Get the 411
Whether preparing your own tax return or paying a
professional, good organization saves time and money. In
addition to collecting the common tax documents (e.g., W-2s,
1099s and mortgage interest statements), you should gather
receipts, evidence of contributions to charities and 529
plans, and basic information on assets sold during 2019.
Also consider milestones that impact taxes, such as
marriage, divorce, birth of a child, adoption and sale of a
home. Organizing this information is the first step toward
ensuring timely filing.
The Tax Cuts and Jobs Act significantly increased the
standard deduction for federal tax purposes. For the 2019
tax year, the standard deduction is $12,200 for individuals
and $24,400 for married couples filing jointly. This higher
deduction amount means many taxpayers won’t itemize
deductions, thereby simplifying tax return preparation.
Consider what actions you can take prior to the end of tax
season to lessen its financial burden.
For example, if you qualify and act prior to April 15, you
may deduct contributions to an IRA up to $6,000 ($7,000 if
you’re over 50) on the 2019 income tax return. Maximum
Simplified Employee Pension IRA contributions of $56,000 for
2019 can be made any time prior to the tax filing deadline,
Or, if you participate in a high deductible health plan, you
may be eligible to contribute to a health savings account
with pre-tax dollars through April 15. For the 2019 tax
year, the contribution limit is $3,500 if you’re single and
$7,000 for families, with an additional $1,000 catch-up
contribution for those 55 or older.
Embrace these technological advances to reduce tax
preparation and filing burdens:
• Whether self-preparing or hiring a professional, tax
information from documents filed with the IRS (W-2s, 1099s.
etc.) can be downloaded directly into tax-prep software, so
be sure to access electronic versions of these documents.
• Online banking makes it easy to manipulate account
information and organize data about relevant expenses paid
during the year, like estimated tax payments, medical and
tuition payments and business expenses.
• The IRS has offered the opportunity for electronic filing
of tax returns for several years. Taxpayers who e-file
typically receive acknowledgement that their returns have
been filed and get their refunds faster than those who paper
More information about financial planning and taxes can be
found by visiting lfg.com.
From market volatility to managing debt, there are many
causes of financial stress today. However, with some prudent
strategies, you can greatly reduce your tax-related anxiety.