ATLANTA — The IRS began accepting tax filings on Friday, officially marking the start of tax season.
You have plenty of time to get your taxes filed - while the IRS is now accepting them, they aren't actually due until April 15.
That gives you plenty of time to work out some of the thorny issues that may arise with stimulus payments and enhanced unemployment you might have received last year, as millions of Americans did.
Financial expert Andrew Poulos joined 11Alive Anchor Shiba Russell on Friday to help provide some clarity on what might be some of the gray areas that the COVID-19 pandemic has caused in tax guidelines:
- Question: Do the stimulus checks and unemployment count as taxable income?
Answer: Stimulus doesn't (but you still need to report it), unemployment does.
Andrew says: "The first thing that you oughtta know is that the unemployment - federal and state - of course is gonna be taxable income. A lot of people are thinking it's free money, but it is taxable - the stimulus check is not.
"So pertaining to those items that have been on the board since last year, people receiving money, those are the things you need to worry about and know about.
"Stimulus is reported on your return but it's not gonna be taxable, but it still needs to be reconciled on the tax return.
"The reason it's reportable is because we still have taxpayers out there who didn't receive either the first or the second, or possibly both, of the stimulus checks. So by reporting it on your return and reconciling it, that means you'll receive it as a refund back to you in addition to any other refund you're due. So be sure to file your tax return correctly, if you don't reconcile it on your return it could create delays with the return being processed by the IRS."
- Question: Can we all deduct a home office this year?
Answer: Nope. If you work for someone else, whether a company or individual, just because our homes suddenly turned into our offices because of COVID-19, does not mean it actually counts as a home office for tax purposes.
Andrew says: "Home office laws haven't changed. If you're a W-2 employee, a wage earner, it's not deductable. If you're self-employed, the rules for self-employees still stand that you might possibly have a home office deduction."
- Question: If you're still waiting on your 2019 refund, do you have to claim it on your 2020 taxes?
Answer: This is specific to people who have found themselves in tricky situations with getting the original stimulus from last year, which was based on 2019 tax returns. If you're still trying to work that out, do not incorporate it into your 2020 filing - the two years are completely independent.
Andrew explains: "The refund's not taxable on your 2020 - each year is independent of another. There are still folks out there who are waiting on their refund on '19 who have experienced challenges in getting those processed, so don't do anything that's gonna confuse '19 with '20's tax year cause it may just end up delaying your 2020 filing as well."