NEXT AVENUE - SPECIAL SECTION
Tax Tips for Filing Your 2020 Return
By Richard Eisenberg
Every tax-filing season seems full of complexities and consternation. But the one we're now in is especially fraught, due to the pandemic: Stimulus checks. Unemployment benefits. Working from home tax issues. New COVID-19 rules for 401(k) and Individual Retirement Account (IRA) hardship withdrawals and loans. Frankly, it's all pretty taxing. That's why my "Friends Talk Money" podcast co-hosts Terry Savage, Pam Krueger and I just released a new episode with advice for 2020 taxes, with help from Wendy Barlin, a CPA and tax strategist. (You can listen to the episode wherever you get your podcasts.) Savage, the nationally syndicated personal finance columnist and author of "The Savage Truth on Money," laid out what you need to know about taxes and any COVID-19 stimulus checks you received (or should have received).
"If you received a stimulus check, that's all tax-free income," Savage explained. "It does not get reported anywhere on your 2020 tax return."
It's especially important to file your return electronically. That will help you get any stimulus refund faster than if you file a paper tax return.
What about people who were employees in 2020 but had to work from home due to the pandemic?
"There is no home-office deduction allowed for them under the current law," said Barlin. "Unfair? Absolutely!"
And what if you had to buy, say, an office chair so you could do your work from home for your employer? Can you deduct that? Sadly, no.
"That line item on the tax return used to be there three or four years ago. It was called employee business expenses," said Barlin. "It was expenses you incurred to do better at your job — whether it was for a chair or to go to a meeting or an education class. That line has gone away."
You can, however, write off a home office if you were a freelancer or had a side business from there.
Read the full story Tax Tips for Filing Your 2020 Tax Returns at NextAvenue.org
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