CARTHAGE, NY — Taxpayers have many different items to pay attention to this tax season – ranging from recent filing updates from the IRS, to COVID-19 impacts on taxable income. Gary Rowe, CPA/Owner of M.R. Gaebel, Tax and Accounting Professionals has issued a brief summary of some of the important notices.
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The Internal Revenue Service(IRS) announced Friday that the nation’s 2020 tax filing season will begin on February 12, a few weeks later than last year’s January open. The federal agency wants to make sure there are no issues for taxpayers. The extra weeks will give the IRS more time “to do additional programming and testing of IRS systems after tax law changes that provided a second round of Economic Impact Payments and other benefits”, the agency said, noting that this is “critical to ensuring IRS systems run smoothly.”
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The IRSand U.S. Treasury Department will stop sending out stimulus checks this week, but there are still ways you can claim the money if you don’t receive it automatically.
Legislation providing for the $600 payments, which was approved by lawmakers at the end of last month, stipulated that the departments needed to issue all payments by Friday. Individuals who are eligible but do not automatically receive their payment by direct deposit, paper check or mailed prepaid debit card will be able to claim the cash when they file their 2020 tax returns. These people should claim the Recovery Rebate Credit when they file. Note: M.R. Gaebel recommends that even if you do not typically file a tax return, you should do so for 2020, so you will be eligible for future stimulus payments.
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Many taxpayers will have effects on their tax filing due to COVID-19 related issues. For example:
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If you collected unemployment benefits (State or Enhanced Federal) you are responsible to claim that as income and pay taxes. Many Americans did not have taxes taken out for those payments.
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I/We received a $1200 stimulus check last summer. Do I have to pay taxes on that money? The short answer is no, there is actually a credit that can be filed.
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If you worked at home because of COVID-19 there may or may not be possible home office deductions available, depending on your filing situation. Many people believe they can get this and it may not be the case under current federal guidelines.
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If you own a small business and received a PPP Loan (Paycheck Protection Program) you may be able to get that forgiven if you meet the criteria. Note: a second round of PPP Loans are available now.
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These and other updates and changes make the 2020 Tax Filings anything but normal. Depending on the persons individual situation there are different answers for different changes. M. R. Gaebel strongly recommends going to a tax professional to seek advice and help prepare an accurate return. Note: Don’t delay scheduling your appt (Just because the deadline for processing has been extended). There are possible dramatic impacts of 2020 COVID-19 year and your individual filings…so it is recommended your get your return prepared and be ready,  so that your tax preparer (such as M. R. Gaebel) can file on February 12.
For more information contact M. R. Gaebel at 315-493-1862.