Have you filed your 2020 taxes yet? We know it can be overwhelming doing your taxes in general and with 2020 being the year of the pandemic, there are even more questions surrounding this year’s tax season and Tax Day. Our financial advisors are here to help – check out answers to some of the most-asked questions of this year:
- Are Stimulus Checks Taxable? They’re not considered taxable income. Because they’re an ‘Economic Impact Payment’, the IRS doesn’t count it toward your income. They will still need to be reported on this year’s taxes though and can be filled out on the new entry in the 1040 form.
- How will unemployment affect my taxes? Unemployment is considered taxable income, so even though the government increased typical weekly unemployment payments, you will still owe taxes on any benefits you received.
- Last year, tax filings were delayed. Will that happen again this year? The deadline has been extended to May 17th.
- What happens if I deferred my college loans, rent payments, or mortgage payments? You will not be penalized for this and will not need to take it into consideration when filing this year.
- If I worked from home in 2020, can I claim deductions for my home office expenses? Unfortunately, you cannot deduct those unreimbursed costs because the Tax Cuts and Jobs Act eliminated those deductions through 2025.
- What if I owe money for my taxes but can’t pay? You can ask the IRS for a payment plan. The IRS offers different types of installment plans to fit what works best for you.
If you haven’t started yet, here is a helpful checklist you might need to complete the job:
- Personal Information – 2019 Taxes from State and Federal, Social Security Number
- Income Information – Including your W-2 forms and 1099 forms
- Deductions – Including Retirement Account contributions, educational expenses, medical bills, property taxes or mortgage interest, charitable donations, classroom expenses, and state and local taxes.
- Credits – Child Tax Credit, Adoption Expense Information, First Time Homebuyer Tax Credits, etc.