HUNTINGTON — Coronavirus affected nearly every aspect of 2020, including taxes, says Candis Adkins, owner of C.A. Tax Service in Huntington.
“There are some changes this year in tax preparation due to the pandemic, such as with earned income credit,” Adkins said. “The higher of 2019 or 2020 can be used, whichever is more beneficial to the taxpayer.”
Adkins says while the stimulus money is not taxable, it is recorded on tax returns.
“Persons that are eligible but did not receive the stimulus money can receive it when they file their 2020 tax return,” she explained.
If qualified retirement funds were withdrawn early due to COVID, Adkins says taxpayers are not required to pay a penalty.
“However, they are still responsible for the income tax on it and that can be spread out over a three-year period,” she said.
Also, educators can deduct up to $250 for un-reimbursed expenses for protective items, such as face masks, sanitizer, gloves and other COVID-related items.
Several people lost their jobs due to the pandemic and received unemployment benefits. Those benefits are taxable income, Adkins said.
“Taxpayers have the option to have federal taxes held out on their unemployment compensation, but state taxes are not held out,” she said. “This is causing many taxpayers to owe state income tax on their 2020 returns.”
Those who did not hold out the federal taxes will also owe tax on the benefits as well, Adkins added.
The tax filing deadline is April 15, according to the IRS.
The income tax brackets have shifted a bit. There are still seven tax rates, but the income ranges for each rate have shifted slightly to account for inflation.
One of the biggest changes to come out of the Tax Cuts and Jobs Act (TCJA) of 2017 was the doubling of the standard deduction. After an inflation adjustment, the 2020 standard deduction is rising by $200 to $400, depending on your filing status. The standard deduction is $12,400 for single filers and $24,800 for married filers. For single heads of household, who are generally unmarried with one or more dependents, it’s $18,650.
Itemized deductions remain the same and IRA contribution limits remain the same, but 401(k) limits increased a bit. There are some other changes, according to the IRS, including being able to save a bit more in your health savings account (HSA), different qualifications for the child tax credit and others that Adkins says she would be happy to help taxpayers with on their 2020 returns.
Adkins, a certified income tax preparer registered with the Internal Revenue Service (IRS) has been doing income taxes for over two decades at her business located at 4318 Ohio River Road in Huntington.
“I also have two seasoned tax preparers in my office that I work with, Rita Murphy and Cynthia Lucas,” she said.
The business is open from 9 a.m. to 7 p.m., Monday through Friday and from 9 a.m to 5 p.m. on Saturday.
“We schedule appointments and do our best to ensure a clean, pleasant, family friendly atmosphere for our clients,” Adkins said. “Because of the pandemic we are seeing clients by appointment only to control the number of people in our office. All normal precautions are being followed such as masks, sanitizing, and requesting that if you are sick or do not feel well, please reschedule your appointment. We encourage everyone to file as early as possible and make sure that you have all of your documentation.”
To reach Adkins, call 304-544-4601.