APOPKA, Fla. – Tax season starts on Friday and it may look different this year, especially for people who hadn’t previously received unemployment benefits.
Certified public accountant Jeff Lareau, with Lareau and Lareau CPAs in Apopka, said they have been helping clients receive assistance.
“Ever since the beginning of the pandemic, we’ve been helping a lot of people work through things like unemployment or other government assistance,” Lareau said.
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Lareua said the pandemic may affect how you file. If you lost your job last year and received unemployment benefits, that money is taxable.
Lareau said you will receive a 1099-G form from the state. It will show how much assistance you received.
“It is taxable income, the IRS will be getting a notification that you received that income and you want everything to match up on your tax return,” he said.
Lareau said if you opted to withhold taxes when you applied for the benefits, you shouldn’t expect to owe. But if you didn’t choose to withhold taxes, you may owe the IRS money.
“You may find, maybe, you owe more on your taxes because you did not withhold on that or your refund is reduced by a certain amount on the taxes on the unemployment,” he said.
Lareau said you do not owe taxes on the two rounds of stimulus payments you received. He adds if you did not get the money yet, you can claim it when you file.
“You will get that credit on the 2020 tax return,” he said.
Lareau said there are other changes this year. He said if you are self-employed and couldn’t work because you or someone you take care of had COVID-19, you can get a tax credit for the days you missed work. He said you should keep documentation proving the time you missed.
“You want to have that proof in a file somewhere in case it ever gets questioned, you’ve got it written down,” Lareau said.
He also said if you made $300 in charitable contributions, you could see an increase in your refund.
“This year, just a special thing for the COVID year, is $300 in charitable contributions can be taken on top of your standard deduction. Doesn’t make a huge difference in your taxes, but it will increase your refund,” he said.
Another great option for taxpayers this year is, Lareau said, people can use their earned income from 2019 to qualify for earned income credit.
“My suggestion is, if you’re an earned income credit recipient, that you should look at it both ways. Look at 2020′s, look at 2019′s and which one is going to give you a higher earned income credit and you can choose that one,” he said.
You have until April 15 to file your taxes.
Click here for more information from the IRS to learn how you can speed up receiving your refunds during the pandemic.