The impact of the COVID-19 pandemic on personal finances could leave many people, used to doing their own tax returns, with a host of questions.
According to Sue Thompson, a partner at H&R Block in Defiance, that is where her and the other tax professionals in her offices can help.
“A lot of people received unemployment benefits this year due to business shutdowns and those benefits are taxable,” said Thompson. “However, the stimulus payments the government sent out are not taxable. Also, anyone who may have received too much through those stimulus checks is not responsible for returning that money.”
Thompson, who has been with H&R block for 35 years, noted there are changes in deductions every year and it is the tax professionals job to utilize those deductions to reduce the taxpayer’s obligation.
“I’ve had customers that first came in years ago and when they realized I could save them money, they have returned every year,” said Thompson.
Among the more significant changes this year according to Thompson are:
• You no longer have to itemize deductions for charitable contributions up to $300.
• When applying the Earned Income Tax Credit, filers may use their 2019 or 2020 income.
• The 7.5% medical deduction has been extended. That doesn’t help on federal taxes, but it can save money on both the state and school taxes.
• Non-Employee Compensation will now file a 1099NEC form.
Last year, with the national shutdowns due to the coronavirus, tax filing deadlines were extended three months to July 15. There is no indication at this time that this year’s filing deadline will be extended and Thompson encourages everyone to get their taxes prepared early.
“We don’t know yet when the IRS will start accepting the filing of returns, but the earlier you get your returns done, the better,” said Thompson. “That way if you owe more money, it will give you some time to save up before your file.
“So get in and file,” said Thompson. “And for those wishing to maintain social distancing, we will take drop-offs at both of our Defiance locations.”