Top tax questions ahead of filing deadline
CHARLESTON, S.C. (WCSC) - The deadline for filing your 2020 taxes is about six weeks away. The IRS pushed back its tax season start date two weeks and officially started processing claims on Feb. 12.
The deadline for taxpayers is April 15.
“The IRS actually had to reprogram all of its computers. So - it’s a little busy right now,” Thomas Spade said.
Spade is a Certified Public Accountant and Accounting Instructor at College of Charleston.
The biggest question he’s getting from clients this year?
“By far- ‘Am I going to get any sort of benefit for working from home?’ Unfortunately, for most people, the answer to that is ‘no,’” he said.
He says the home office credit used to be allowed for regular employees and independent contractors, but that changed at the end of 2017 with the “Tax Cuts and Jobs Act.” Now the home office credit is only for independent contractors, Spade said.
That may be disappointing considering one Stanford University economist estimated the pandemic pushed 42% of the American workforce into home offices.
Spade had a tip to offer. “One thing to possibly consider is ask your employer if they want to reimburse you for those costs, which would be tax free to you and deductible to the employer...They’d probably would be saving anywhere from 25 to 30 cents on the dollar maybe for every dollar they reimburse you.”
We also asked him about coronavirus relief money taxpayers got last year and at the beginning of this year. Should that impact your taxes or your income that you report?”No it shouldn’t,” Spade answered. “Best news ever!”
He says the relief money was basically an advanced tax credit.
“If you didn’t get enough, you get the difference back as a tax payment. And if you got too much, well, you don’t have to repay it. It’s great news.”
And more good news. While it might have been a stressful year to have a baby, it does qualify taxpayers for the regular child tax credit and the stimulus. Spade said, “So if you had a child during the year, and let’s say you got your regular stimulus payment, but you didn’t get one for the dependent because the IRS didn’t know about it, now you get that back as a tax credit on your tax return.”
Another change on taxes this year? Charity donations.
Now, even taxpayers who take the standard deduction can claim up to $300 for cash donations made to charities during 2020. Previously that was only available if you itemized your tax return.
Lastly, Spade says online tax programs can be great for simple financial situations.
But he has a warning. “If you are not comfortable or do not know your situation tax-wise, bring in an expert.”
The IRS advises checking it website for qualified tax preparers.
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