ROCKFORD (WREX) – After being deducted a month ago, the tax filing deadline is Monday, May 17th. But this year the impact of the pandemic could change how much you pay in taxes and how much money you can get.
This is because tax filing has always been complicated, but help from the coronavirus has brought additional challenges in filing tax returns.
“Everything went slower, there’s fog, there’s fog COVID,” explains Herbert F. Allen III, CEO and senior investment analyst at MainStreet Financial Group.
Let’s start with incentive checks, on which you don’t have to pay taxes. But if you don’t get money for incentives, two things can happen:
- If you overpaid the tax, the incentive will be added to your refund.
- If you owe money, the incentive will be used to pay the unpaid portion.
“It’s kind of slimy, because it’s nice to just get a check,” Allen says.
But incentive money isn’t the only non-taxable income this year.
Unemployment insurance payments
“$ 10,000 in unemployment insurance payments would not be taxable for 2020,” says CPA Marion Momaly.
That’s a decision the IRS made in March, meaning any tax returns filed before that were wrong.
“The IRS has decided that they will just launch a search for those returns and send people a refund,” Momaly says.
Salary protection program
In addition, any costs you have paid with money from the Salary Protection Program or PPP may be deductible.
“I think the pandemic has affected almost every part of our way of calculating wealth or its scarcity,” Allen says.
And that’s because there have been other changes in filing tax returns that benefit taxpayers.
“Now there is no age limit for contributing to your IRA,” Momaly explains.
So if you’re over 70 and have a part-time job, that applies to you.
But that’s not all. If you have a Roth IRA, you have another week to add.
“Even if you’ve filed a tax, you can still make a contribution for your Roth for 2020,” Allen says, encouraging anyone eligible for Roth.
Debt money and extensions
And a reminder to everyone who owes taxes, you have to try to pay by next Monday.
If you don’t owe money, Allen says you can easily add an extension online. That would set you a new deadline of October 15th.