Your burning questions have been answered, from remote working to stimulus testing

0
66

Auditors say this year they are asking several new questions from people concerned about how the pandemic and its emergency response will affect their filing. The tax return officially opened on February 12th, the first day the IRS began accepting tax returns for 2020.

“It’s going to be the busiest tax season yet,” Kesha Jontae, an Atlanta-based income tax strategist, told NBC News.

A number of laws passed under the CARES Act last March have a direct impact on taxes, from expanding unemployment benefits to waiving IRA withdrawal fines. Customers are also wondering how to consider their stimulus reviews and the tax implications of their remote work situations. The constantly updated guidelines keep tax professionals on their toes.

“It takes a little longer to find out exactly how the new laws, which were passed literally a month ago, will affect your tax returns,” Jontae said.

It even changes how tax professionals meet their clients. As the pandemic began, CPA Edward Arcara’s Buffalo, New York office quickly adopted social distancing measures, such as meeting customers in parking lots for document handovers and discussions. Now that it’s been almost a year, they’ve gotten a little more sophisticated.

“Although we are still holding the parking lot briefings, we ask our customers to use our secure Dropbox in our anteroom. We did zoom and team meetings, but it’s still pretty new to some people, ”said Arcara. “Never get bored here.”

Here are the questions customers say CPAs keep asking:

Are stimulus checks taxed?

No. “The payment is not income and taxpayers will not owe any taxes on it,” said the IRS.

I never got my stimulus check or it was less than it should be. How can I get it through my taxes?

Filers can claim missing payments for economic impact by requesting a refund credit. This includes the additional payments of $ 500 and $ 600 for dependent children under the age of 17.

Do I owe taxes on my unemployment benefits?

Unemployment income is taxable. If you have not chosen to have tax withheld, you owe money for it at tax time.

I work remotely now. Can I make the home office deduction?

For the most part, only the self-employed can make a home office deduction. If you have your own place of work at home for a “side appearance”, you can deduct the house costs that are directly related to this independent work.

I worked remotely outside of the state. Do I have to pay state taxes twice?

It depends on whether. If you’ve worked in another state for more than 183 days, or about 6 months, you will likely have to pay taxes in the state you originally lived in and your remote location. However, if your state has a mutual agreement with your home state, you can avoid double taxation. And if you’re one of those camped out in Texas or Florida and don’t have state taxes, you won’t owe taxes in those states.

Can I deduct business expenses paid with a loan from the paycheck protection program?

If the funds have been used to cover eligible expenses under the PPP program such as rent and utilities, they are deductible. The IRS released new guidelines on Jan. 6 that reversed previous guidelines – a relief for small businesses but a headache for their accountants.

How are early retirement withdrawals affected?

The CARES Act waived early withdrawal penalties for savings plans such as 401 (k) or IRA for people under 59.5 years of age. But the money still counts as normal income. Applicants have three years to repay the money and receive a refund of taxes paid.

The opening of the tax season has been postponed for a few weeks. Do I get more time to submit?

No, it’s still April 15th.

Should we expect delays with the IRS with the compressed season?

The IRS is staffed at a slightly lower level than normal, but is ready. The agency strongly recommends electronic submission this year, as paper returns can cause additional processing delays. For quickest refunds, email and use direct deposit.

Jo Ling Kent contributed to this.

Source link