2020 was a year that many would, understandably, prefer to put behind them. The Coronavirus Pandemic has changed our world in ways that it may never recover from, so the only thing to do is to put your best foot forward and make the most of today, in order to prepare for tomorrow. The last thing we have to do in order to put 2020 fully in the rear view is file your tax return. Taxes. . . 2020 surely is not going down without a fight.
As a response to the virus, the Government recently issued a $2 Trillion stimulus package to help struggling families and boost the economy in the form of an additional $1,400 check. This check will not be counted as taxable income. Instead, it will be treated as a refundable tax credit. This basically means that this $1,400 is treated as an advance payment toward your 2021 tax return.
There are also a number of tax deductions and credits that should be looked into, because if you qualify it can put some extra money in your pocket. There are charitable deductions that can be applied on all of the money that was donated to charitable organizations in 2020. Deductions for medical purposes are also available. If you spent a large amount of time in the hospital, or have excessive health costs in 2020, they can be deducted up to 7.5% off of your Adjusted Growth Income. There are a number of deductions available for the self-employed, such as travel and home office deductions. Unfortunately, those who were required to work remotely from home will not qualify for these self-employed business deductions. If you are self-employed, it would also behoove you to look into Paycheck Protection Program (PPP) loans. These loans have been designed to help small businesses keep the doors open. Any business expenses paid for using PPP loans will be deductible from your taxes, and PPP could possibly be increased very soon, so this is definitely something to keep an eye on.
A lot of this talk about deductions, and PPP loans can make your head spin, which is why ORT Consulting has a number of experienced professionals available to consult you on any of your tax filing needs. For more information, please visit www.ortconsulting.com