TERRE HAUTE, Ind. (WTWO/WAWV) — Stimulus checks, collecting unemployment, and other unique circumstances may impact your filing your tax return.
Money received through stimulus checks will not be taxed. However, if you didn’t get one or believed the amount received was not enough, you can fill out a recovery rebate credit form.
According to Stadler and Company regional manager Lori Carpenter, this year will provide a new option to report unemployment benefits. They include a form that includes the sum collection added to your return or a new option.
“For some people, if they received unemployment when they would usually have income, there’s an earned income credit. There’s a special circumstance where they can use last year’s income to claim that credit,” she said.
Carpenter also says that there has been an increase of people who had withdrawn from their 401K retirement plans to assist in financial struggles. Options to avoid a penalty if someone has withdrawn to early include paying it off over three years or if it was used due to COVID-19, they may not have to pay the 10% penalty.
Businesses that have received financial help through the government, specifically the payroll protection program, will notice differences in this year’s tax return filing.
“The Payroll Protection Program, when you apply for forgiveness, the money that is forgiven is not taxable income. You can deduct all the expenses used to forgive that loan,” Thomas Jeffers, President of Tax Masters 2, said.
Jeffers says that with businesses that have received certain loans or grants, it’s important to verify if that amount received is eligible for a return.
“When those programs became available, there was uncertainty. There was a grant from the Small Business Association that wasn’t supposed to be paid back, they reversed their decision. The last provision now says they don’t have to pay it back,” Jeffers said. “The fact that there is so much uncertainty, small business owners have the right to be apprehensive,”
Businesses such as Stadler and Company and Tax Masters 2 both have adapted to new circumstances, creating an online web portal for taxes to be filed via the web.
Anyone wanting to begin the online tax return process can do so now, though online applications won’t be accepted until Feb. 12.
