HARTFORD, Conn — On Wednesday, the IRS pushed the tax filing deadline from April 15th to May 15th. The COVID pandemic has made a lot of aspects of life more complicated, and taxes are no exception. But what do you need to know to get your maximum refund from Uncle Sam? We talked to the experts at Jackson-Hewitt.
This year a record 23.1-million people filed for unemployment. Is it taxed? Usually — but not this year. "Exempting $10,200 of unemployment benefits from taxation or $20,400 for a married couple," said Mark Steber of Jackson Hewitt Tax Service. Most of us got stimulus checks. Are they taxed? "No. stimulus money is not taxable. Do not put them on your tax return," said Steber.
Here are some things to know that could boost your refund! If you have young kids, the child tax credit is now $3,600. "That’s per child," remarked Steber. "And the important point to note is it’s not only a bigger credit. They’ve changed some of the earnings levels where you can make more money, but more importantly, the credit now is a refundable credit."
More breaks. If you are a teacher, you can deduct up to $250 for hand sanitizer, masks, and any supplies you bought related to COVID. And for the first time this year if you donated to a charity, you’ll be able to claim up to a $300 credit regardless of if you itemize or take the standard deduction.
One disappointment - with many people working from home due to the pandemic, can you deduct working from home expenses? Probably not. "The home office deduction is largely reserved to anybody who has a home office-based business. That is, you run your business out of your home," said Steber.
The pandemic has also triggered new tax rules on retirement accounts. Older folks weren’t required to make minimum withdrawals this year, which could lower your reported income and boost your refund. There’s also no 10% penalty for taking early withdrawals if you needed that money to stay afloat in the pandemic. "There were some great lucrative tax benefits put in as part of the cares act in the pandemic that will allow people to borrow money from any of their retirement plans or forfeit and not have to take their required minimum distributions, and a lot of people did."
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