It is no secret that the Corona Virus has wreaked havoc on nearly every aspect of our lives for the last year. To mitigate the spread of the virus, many have been laid off or lost their jobs and businesses. Millions are now working or going to school via video conferencing applications. It has not been easy, by any means.
To help soften the blow that Corona Virus has dealt us, the government passed a relief package earlier last year. They have also made some adjustments to the codes that govern taxes. This tax relief is aimed at providing tax help to individuals and businesses nationwide. However, knowing exactly what tax relief is available can be confusing. As you get ready to file your taxes in 2021, you can always turn to the team at Ideal Tax Solution for tax help you can trust.
We have put together this brief guide to help you understand just how you can expect Corona Virus to impact your taxes.
Typically a Non-Filer?
The Coronavirus Aid Relief and Economic Security (CARES) Act is going to require that certain individuals who have not had to file a federal return in the past, file one for 2021. This is the only way to be eligible to receive the $1200 stimulus check guaranteed under that legislation.
If you traditionally file a federal return for your taxes, things may look different when filing your 2020 taxes. Perhaps you are retired and took advantage of some of the tax relief options through the CARES Act. One such benefit was penalty-free 401K withdrawals. You will have to account for these choices on your return. Getting tax help from Ideal Tax Solution can give you peace of mind knowing you’re reporting these changes accurately.
Be mindful that if your employer has mandated that you work from home, you may be obligated to pay state and local taxes. This will apply to both, the jurisdiction of your employment and your residence. If you are not instructing your employer to withhold your local and state taxes correctly, you could get an extra tax bill.
Working remotely due to the Corona Virus?
A common question has been if you were sent home to work, can you take the home office deduction. The short answer is no. If you do not typically work from home, you will not be able to take the home office deduction. This deduction only applies to those who are self-employed or independent contractors.
Often overlooked in this tax crazy year is the 529 plan. If you took out money to cover 2020 college expenses and your child was sent home, you will need to replace that money in their 529 or you will get hit with taxes and penalties.
As you can see, the tax filing for 2020 could be more confusing than ever. However, the professionals at Ideal Tax Solution can provide you with friendly and knowledgeable tax help to protect you.
We provide professional guidance to people whose lives have been affected by tax problems. To evaluate your specific tax issue and determine if you qualify for tax relief, please contact us for a free consultation. We are COVID-19 prepared, we will work with you over the phone and via e-mail.
The content of this post does not replace the advice of a licensed tax professional. Consult a qualified tax professional for questions specific to your circumstances.