If you ’re still solve from home because of the COVID-19 pandemic , you probably notice that you ’re save up a moment of money every week on dry cleanup , commuting , and your unsporting fiddling caffe latte habit . But while you might have some extra pouch change as a result , the grownup question is how your newfangled status affects your 2020 revenue enhancement returns . Can you indite off that young work calculator you just buy for the home position ? And if you temporarily uprooted to a unlike nation , which body politic do you pay taxis in ?
We blab out to some revenue enhancement professional to aid resolve a few burn interrogation about how your ( virtual ) trip to the accountant might bet a short unlike this yr .
1. Do I qualify for the home office deduction?
Per the 2018 Tax Cuts and Jobs Act , employees who shape from household are no longer eligible for thehome business office deductionthrough 2025 . So , unfortunately , if you get a W-2 revenue enhancement form from your employer , you wo n’t get any breakson the fancy new office chair you splurged on .
The best - display case scenario is if your employer recoup you for any home office - related purchase you need to make for work remotely , Tai Stewart , an enter agent and founding father ofSaidia Financial , explains . It ’s basically a profits - profits for you and your employer . “ Your employer would be able to take the deduction on the business concern ’s taxation , but you would n’t have to claim that as income , ” Stewart says .
So , while your employer can take off certain expense if they paid for your internet , equipment , and software , you , the employee , could not . But if you ’re self - engage or are an main contractile organ , the good news is you may still take a family office entailment , as Josh Zimmelman , handle partner ofWestwood Tax and Consulting , tells us .
First , you ’ll need to stipulate . In decree to do so , your home office must be a designate space that is used exclusively and regularly for your barter or business , ” grant to the IRS , and be the elementary locating of your business organisation . “ [ If ] you turned part of a spare room into a workspace , you may be able to claim it , ” Zimmelman say . “ If you just fetch a laptop into the hideout sometimes , that ’s not a rest home office and not deductible . ”
2. Are there any new deductions that I could be eligible for?
The main revenue enhancement cite that you might be eligible to receive on your 2020 taxes is theRecovery Rebate Credit . If you did n’t receive a stimulus check in 2020 , or did n’t get the full amount — which was $ 1200 for individual taxation filers and $ 2400 for married folks — you could claim this credit entry , which was part of the CARES Act .
Here ’s the particularly sweet part : If you did n’t receive either of the two stimulus payment in 2020 , you might be able to receive it with your 2020 tax return , Stewart explains . It would get tacked on to your refund .
3. I work from home in one state but my employer is located in another. Which state income taxes do I need to pay?
Let ’s say you work 100 pct of the time from home in 2020 in a different country than the one your employer is physically located in . In that case , you typically only need to pay income taxis in the state of matter you reside in , not in your employer ’s state , Stewart says . But if you performed study in both state of matter before your company make a motion to a remote apparatus , then you might ask to pay up income taxes in both .
However , some states have mutual arrangement with each other , Zimmelman excuse . What this means is that you would only need to bear taxes on where you live , even if you did work in another state of matter . These are usually neighboring country , and it look on where you live and where your employer is based . For example , New Jersey and Pennsylvaniahave a reciprocal agreement .
While you might only postulate to pay taxes in the state you subsist in , you would still need to file returns in both states : a occupant return in your dwelling state , and a non - resident return in the other .
4. In 2020, I temporarily moved to a different state because of the pandemic. How might this impact my taxes?
As mentioned , if you work for an out - of - state employer and did n’t perform any work in that state in 2020 , you believably wo n’t need to pay income taxis in that state , Zimmelman says . But rent ’s say you then move to another United States Department of State for a few months in 2020 because of the pandemic . In that fount , you might take to bear income taxes in both your original home state and the one you incite to , even if it was only temporary .
“ Typically , you would separate your income and deductions between the two returns , based on how long you inhabit in each state , ” Zimmelman says . “ However , some states have more complicated rules , so suss out each country ’s physical process to verify you ’re doing it right . ”
Remember : Even if your move was only temporary due to COVID circumstances , you might still owe taxes in that state . “ The longer you stay away from your home body politic , the more likely you will have a tax indebtedness in the second country , ” Zimmelman tell . “ And that does n’t mean you ’re nontaxable from revenue enhancement in your home res publica . ”
5. I worked part-time and received unemployment benefits or compensation from a work-share program. Do I need to pay taxes?
body of work - share programsprovide employees with partial unemployment benefits if they see their hours reduced by a certain percentage , and PUA [ Pandemic Unemployment Assistance ] benefits “ [ are ] used to assist families who are unemployed , underemployed , or ineffective to work because of the current pandemic situation , ” Stewart explain .
“ Generally speak , however , the recompense receive from a work - contribution program or PUA benefits istaxable income , ” Stewart says . “ Just as you may be required to make up income taxes when you roll up unemployment compensation , this type of compensation would fall under taxable income . ”
6. I received a stimulus check last year. Do I need to pay taxes?
While this does n’t pertain just to work - from - home common people , it ’s something that has probably cross your head . In brusk , the input baulk is not nonexempt income , but you will need to show it on your tax retort . mention that it does n’t factor into your refund or any taxes owe , Stewart explicate .
7. Any tips for a virtual trip to the accountant?
As an employee , the deadlines for receiving your W-2 have n’t change , Stewart says . And just like you would if you were n’t working from home base , keep all revenue enhancement - related documentation on hand and keep good book . Also , reckon the fact that your tax professional is probably work remotely , Zimmelman summate . That means you should have all your tax documents ready to hand , so they can be send out to your accountant electronically . And verify to test that your phone or image scanner can get a high - quality digital written matter of your documents before set up an appointment .
“ Do n’t just netmail your documents , or you might open yourself up to identity thievery , ” Zimmelman enounce . “ Ask your accountant if they have a secure portal for uploading important document . ”
The dominion and deadline might transfer again before the April 15 deadline , so keep an eye out for any developments and reach out to a tax professional for update .
