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Reminders before filing 2020 tax return

Choose Direct Deposit - The Safest, most accurate and fastest way to get refund is to electronically file and chose direct deposit. Also, if there is another round of stimulus payment the government will have your information available right then and you will receive money faster than you would any other way.

Unemployment Income is Taxable - Millions of Americans received unemployment compensation in 2020, many for the first time. The compensation is taxable and must be included as gross income on your tax return.

Home office deduction - The home office deduction is available to qualifying self-employed taxpayers, independent contractors and those working in the gig economy. Employees who receive paycheck or a W-2 from an employer are not eligible for this deduction.

Earned Income Credit - EITC can give qualifying workers with low to moderate income a substantial financial boost ($538 to $6,660). EITC not only reduces the amount of tax someone owes but may give a refund even if individual does not owe any taxes.

Charitable donation deduction for people who do not itemize - Individuals who take standard deduction generally cannot claim a deduction for their charitable contributions. However, the CARES Act permits these individuals to claim a limited deduction on their 2020 federal income tax return for cash contributions to certain qualifying organizations of up to $300.

Casualty Losses - Special tax law provisions may help taxpayers and businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area. In 2020 we had a several hurricanes that affected Louisiana and some of you may qualify for casualty loss deduction.

Dragana Moran

Dragana's World