The 2020 tax season is not too far off. That means that Connecticut residents only have a short time left to address some issues so that there are not problems when they eventually file their income tax returns. What are some of the common problems people are expected to deal with this coming tax season if they choose not to take action to address specific issues now?
Problem number one: Failure to pay estimated taxes or the underpayment of such taxes. Quite a few Connecticut residents are self-employed. These individuals are generally required to pay estimated taxes throughout the year. Failing to do so or failing to pay enough could result in one owing a lot come April.
Problem number two: Not understanding the changes to medical expense deductions. Over the years, lawmakers have changed the threshold for medical and dental expense deductions. For 2019 taxes, the threshold is up to 10%. This means that in order to deduct medical or dental expenses, those expenses must add up to 10% of one's adjusted gross income. This threshold increase will make it harder for some Connecticut residents to qualify for this benefit.
Problem number three: Not understanding the elimination of the alimony deduction. Those who divorce this year and who have to pay alimony as part of their divorce settlements will miss out on the ability to deduct these payments on their taxes. This could cost some people thousands a year.
Problem number four: Income reporting issues. Reporting all income to the Internal Revenue Service is a must. Some people fail to do this, though. Not reporting income in full can result in one facing some severe penalties.
There are many other income tax problems Connecticut residents are expected this have this coming tax season. When issues do arise, working with the IRS can be intimidating. Thankfully, that is something no one has to do alone. An experienced tax attorney can step in and help one resolve the matter as quickly as possible.