The tax season will start on Friday, February 12, 2021.
One year after the pandemic, some taxpayers want deductions, credits and COVID-19 relief for their 2020 donations.
Tax consultant Neville Ortiz Soto (Neville Ortiz Soto)
A tax preparation company with offices in central Florida answered questions about the impact of COVID-19 on the current tax season.
Starting in March, thousands of full-time employees were sent home and continued to work remotely for the rest of the year.
Dining tables, sofas and housing areas have all become temporary offices. Some people invest in desks, computers, high-speed Internet and office equipment to facilitate work at home.
Ortiz Soto said, however, if you work in a company, you cannot deduct the right to use your property as a remote office. Experts said: "There is no special protection for this line (ordinary employees working from home)."
The "home office" deduction applies to business owners or independent contractors who must report "self-employment taxes" using Form 8829.
If this is the case, please remember that the area must be “dedicated for commercial use.” It cannot be a dining table where children eat or a balcony where children play. "Ortiz Soto said.
He added that there are exceptions to family-based childcare.
Although certain expenses (including house use fees) can be deducted as "
"Ortiz Soto warned that during Trump's 2017 tax reform, the classification of certain employees was severely restricted and belonged to very specific categories.
He said: "That is already a spreading problem, and this problem is becoming more and more serious, because now you have more people using the house [for work-related activities] and there is no specific protection of."
Employees and educators who qualify for this deduction
Including armed forces reserve personnel, qualified performing artists, state or local government officials (for a fee), and employees related to disability.
As many parents learned last year, homeschooling is not easy. It also requires investment of time and money.
Based on the average family study cost per student, each child can climb to $1,800 per year.
However, there is no federal tax relief for family education expenses. Some states provide tax relief, but Florida does not.
Ortiz Soto admitted: “Last year’s legislation focused on helping parents who had to leave their jobs to help their children go to remote schools and qualify them for unemployment.”
In this tax season, there is a new rule that can help people affected by unemployment or income changes in 2020.
According to the 2020 tax relief law related to COVID, taxpayers can choose to use their 2019 income to calculate
If its income in 2019 is greater than its income in 2020.
For taxpayers whose income is less than $56,844 in 2020, they may be eligible for income tax credits. of
, Available in English and Spanish, can help determine who meets the conditions. The EITC is up to $6,660 for families with children, and up to $538 for taxpayers without eligible children.
For details, see
Low interest rates, job transfer and opportunities for remote house purchases by 2020. According to IRS data, this means tax-saving opportunities for first-time home buyers.
You can deduct mortgage interest, which is usually higher at the beginning of the loan term.
You can also deduct property taxes.
Florida residents can also request a "house tax exemption", which may result in a $50,000 reduction in the tax assessed value of your home. After the first year, the assessed value for each subsequent year cannot exceed 3%.
The application must be submitted at your local county property appraiser office.
Compared with the unprecedented financial impact of COVID-19, tax relief programs seem scarce. However, Ortiz Soto emphasized "the obligation to return the goods on time."
This does not mean you have to pay. At least not immediately.
He added that to avoid tax evasion at all costs, and to submit monthly, 5% interest per month, up to 25% interest.
He suggested submitting form 9465 and creating an "automatic payment plan with a maximum length of 72 months."
If you incurred medical expenses last year, the Tax Cuts and Employment Act of 2018 provides a deduction for eligible medical expenses that exceed 7.5% of your adjusted gross income.
According to CARES ACT, this regulation becomes permanent. However, if you itemize it, you can only make this deduction.
Ortiz Soto pointed out that the standard deduction for 2020 is US$12,400 for singles and US$24,800 for married couples. "Today's standard deductions have gone up a lot, so you can list medical expenses one by one (it is recommended that you see all the deductions. They must all be greater than the standard deductions," he said.
If you withdrew money from your 401(k) plan or individual retirement account last year, you can enjoy the preferential terms of "qualified participants" in retirement plans under 59 1/2. The protection of the CARES decree allows the group to use their savings without suffering the usual 10% fine.
Program participants can withdraw up to $100,000 from their account and recognize it as income within three years for tax purposes. They were also given three years to replace the money withdrawn into the account without any fines or tax owed.
Refers to people who have been diagnosed with COVID-19 or their spouse or family members, or people who have suffered certain adverse financial consequences due to the pandemic.
If you receive unemployment benefit, you must include it in your gross income report. Refunds or payments are based on federal withholding tax.
Taxpayers can expect to receive
. To determine whether your unemployment compensation is taxable, please visit the following link:
Economic impact payments are not subject to taxation and will not reduce taxpayers’ refunds when they submit tax returns in 2021.
In other words, if you have received all of the economic stimulus checks, you do not need to include any information about the checks in the declaration form.
If you did not receive the stimulus payment or only received a partial payment, you may be eligible to claim compensation
On your 2020 tax return.
The tax credit is calculated based on the 2020 income tax. Usually, the credit will increase your tax refund or reduce the amount of tax you owe.
To speed up refunds and help them file their tax returns, the Internal Revenue Service (IRS) urges people to follow these simple steps:
The average tax refund last year exceeded $2500. It is estimated that 150 million tax returns will be filed this year, most of which will be submitted before the deadline for filing on April 15.
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