With all of the uncertainty caused by the pandemic, the last thing any of us needs is a big tax surprise. Be prepared for these potential pandemic-related issues when you file your 2020 tax return.
If you received unemployment benefits in 2020, you need to report these benefits on your tax return as taxable income. Check to see if either federal or state taxes were withheld from unemployment payments
you received. If taxes were not withheld, you may need to write a check to the IRS when you file your tax return.
Did you pick up a part-time gig to make ends meet? Payments received for performing these jobs may not have had taxes withheld. If this is the case, you’ll need to pay your taxes directly to the IRS on April 15.
If you run a business that was hit by the pandemic, you may find that your estimated tax payments were either higher or lower than your actual tax liability. Now that 2020 is in the books, run a quick projection to ensure you are not surprised with an unexpected tax bill when you file.
A good surprise! If any of your stimulus payments were for less than what you should have received, you can claim the difference as a tax credit on your 2020 tax return.
Your CPA can provide guidance on these or any other questions you have on your 2020 taxes. Don’t hesitate to contact Alloy Silverstein for assistance.
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