If you keep an eye on the deductions this year, you can save thousands of dollars. Keep these receipts.
MINNEAPOLIS – It’s everyone’s favorite time of year, tax season.
And this year’s tax season is even more confusing than most.
At KARE 11, we are constantly receiving questions from viewers about this year’s tax returns.
We set out to answer some of the most frequently asked questions.
Scott Kadrlik from Meuwissen, Flygare, Kadrlik and Associates was kind enough to provide us with his expertise.
Can I claim the computers, books and office furniture I bought for my children in distance learning this year?
“A deduction will be made on your Minnesota return for education costs incurred to teach them at home,” says Kadrlik.
Parents can apply for both an education tax credit and an education allowance.
Kadrlik says the loan will only go to lower-income families who qualify.
To see if you qualify Click here.
However, the deduction is available to everyone.
For kindergartens up to 6th grade, parents can request a deduction of up to USD 1,625 per child.
For Grades 7 through 12, parents can claim $ 2,500 per child.
“These have to be school supplies that are really needed to be taught at home,” says Kadrlik.
So if you’ve bought your child a new laptop, office chair, books, or anything else related to education, keep these receipts on hand.
For a list of qualified deductions, Click here.
How about the home office that you set up so you can work from home?
Kadrlik says you likely won’t be able to claim any of these expenses towards your taxes.
“From now on you have to be self-employed in order to receive a deduction for the home office. You have to use this home office exclusively and regularly for your own company, ”explains Kadrlik.
So if you work for a company and you normally go to the office but suddenly work at home these days, Kadrlik says you don’t qualify for a deduction.
However, he says many companies have chosen to reimburse their employees for these additional costs.
He recommends contacting your boss or HR manager to find out what home office expenses are eligible for reimbursement.
How about people who had to claim unemployment for the first time? Do they have to pay taxes on the money they received in 2020?
“Unemployment benefits are taxable and will be included in their income this year,” says Kadrlik.
The IRS gives people who have received unemployment the option to either pay income tax immediately or wait until later.
Kadrlik says people who have already paid this income tax are aware, but if they haven’t paid, that money is owed when they file their tax return.
Do you have to pay taxes on the stimulus payments?
“The stimulus payments are NOT a taxable item,” says Kadrlik.
So you don’t have to pay tax on these stimulus payments, but the stimulus payments will be displayed when you return.
If you are owed money, had a new child, or your income went down in 2020 and you suddenly qualify for a stimulus check, Kadrlik says these payments will be added to or deducted from your tax refund on or from money you receive owe the IRS.
If you still have questions, read the IRS website.