Looking For Deductions On Your Taxes? A Tax Expert Has Some Advice
It’s that time of year as we get ready to do our taxes.
As you look back in the past year for any chances of deductions, ABC10 spoke to a principal tax research analyst on what we can expect.
“One interesting change for 2020, for the first time, if you don’t itemize you can still deduct $300 of charitable contributions, and it’s an adjustment to income, which is a very good type of deduction. So, that’s one thing that can help a little bit,” Nathan Rigney, principal tax research analyst with H&R Block said.
If you picked up some gig work like driving Uber or Lyft or delivered groceries through Instacart be prepared for those taxes.
“Gig workers have to pay all of their own taxes,” Rigney said. “They have to make estimated payments. If they don’t make estimated payments they’re gonna have all that tax due at one time when they go to file their taxes. They also have to pay self-employment tax.”
If you filed for unemployment, those benefits may be taxable on your federal return.
“You’ll get a 1099G in the mail showing how much unemployment benefits you received and then that’s what you’re going to take to your tax pro or that’s what you’ll use when completing your return,” Rigney said.
If you didn’t get that form, you can pull it up in your UI online account.
A new change as part of the American Rescue Plan means people who received unemployment benefits will not need to pay federal taxes on their first $10,200 of benefits.
Meanwhile, if you’re a small business owner who received a Paycheck Protection Program loan, you can deduct expenses paid through that loan. However, if you’re an employee working from home like many who made that adjustment in 2020, you’re on your own.
“If you’re an employee unfortunately even if you incurred all these additional expenses to build out your home office and make it comfortable those are not deductible on your federal tax return that was due to a tax law change,” Rigney said.
Source: ABC 10 News