It’s tax season again, and hopefully everyone’s ready with the information their accountants or tax preparation people need to represent them properly. There aren’t a lot of changes via lawmakers this year, but there are a couple of new things we feel need to be mentioned.
First, obviously the entire country had to deal with the pandemic. Some people lost their jobs, while others had to work from home. Some restaurants closed (some permanently) while others figured out ways of doing either delivery, pick up or both. Some businesses qualified for and received PPP relief loans. And of course many people qualified for those stimulus checks. Let’s talk about some of these things.
For those of you who lost your job and qualified for unemployment benefits, you need to know that unfortunately you still have to pay taxes on that, whether or not you received Form 1099-G from the federal government or qualified for benefits in your particular state. That’s always been the rule, so that’s not a change in policy.
If you worked from home but were still employed by the same employer, you don’t get to write off any business expenses such as an office like you would if you were self employed.
If you were a restaurant, probably the only change you’ll have to deal with is if you paid any of those delivery services to take your meals to your consumers. You get to write that off as a business expense. If you added a service charge to outside orders, you’ll have to claim that as income. For you and every other business that qualified for and received a PPP loan, you have to declare that as income only if your loan wasn’t forgiven by the government. Otherwise, it was declared as non-taxable; we hope you qualified for that benefit.
Did you qualify for a stimulus check? If so, you can breathe safely because it’s also non-taxable. If you get a second check later in 2021, it’ll also be non-taxable. If you qualified for the stimulus but didn’t get the money, you’ll get a credit when your taxes are filed if your forms are filled out properly; your tax preparer will know how to do that for you.
Whether or not you gave donations to charities for the year (we hope you did), you can claim up to $300 without itemizing or proving you made those donations.
Bitcoin is new to many people, so the question arises as to whether or not it’s taxable. Whether you bought, sold or exchanged any of your virtual currency holdings this year, you have to report it to the IRS this year. That’s not different from what you’d have to show the government if you invest money in the stock market and it generated a profit.
That’s pretty much it; everything else either stayed the same or the change is so minimal that there’s nothing much to address. We hope this information helps; good luck with your taxes this year.
