Tax time and how to file in a pandemic
BANGOR, Maine (WABI) - Before you turn the page on 2020 for good, there’s one lingering thing to take care of.
Tax Day is April 15th, and unlike last year, there is currently no automatic extension to file due to the pandemic.
“Unless they extend it, and unless people do extensions, they’ll have to file by April 15th,” said Diane Morse, a tax expert at Marshall Planning, LLC.
A few big changes to this tax season include a standard deduction increased to 12-thousand 400 dollars for single filers and 24-thousand 8-hundred for couples filing jointly.
“It’s going to help them a little bit, but not much. They will have the option this year of taking a 300-hundred dollar charitable deduction which in the past they haven’t been able to do, unless they itemized, so that’s one thing that’s changed. Every little bit helps as we all know.”
Income tax brackets also increased in 2020 to account for inflation.
“Due to COVID-19, most people have lower earnings in 2020, which is really going to affect their refunds for the earned income credit and additional child tax credit. In December of 2020, they passed this new consolidated appropriations act which allows people to use their prior year income to calculate the earned income credit and additional child tax credit. I’ve worked up a couple of examples that shows the difference in the refunds, and it’s amazing.”
Economic Impact Payments or stimulus checks will not be taxed.
However, experts say you still need to report you received that money when filing.
If you collected unemployment benefits and withheld from paying taxes when receiving those payments, you will owe that to the IRS on April 15th.
“I expect to see lower refunds compared to last year because of that unemployment.”
If you have questions about filing this year, it may be time to consult a tax expert.
“Maybe this is the one year that you might want to go and have them professionally done rather than do them yourself.”
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