![]() Farmer says reimbursement for expenses like high-speed internet and home office equipment is a conversation to have with your employer.įor business owners who received Paycheck Protection Program loans, expenses paid out with that money are deductible.Īs for the stimulus checks, you don't have to pay taxes on that money.įinally, remember the date - Tax Day is Thursday, April 15, 2021. When it comes to people who started working remotely, you can’t claim a home office deduction unless you’re self-employed. “So, then you want to add that to your mortgage interest, real estate taxes and charity to see if you itemize or take the standard deduction.” Whatever medical expenses are over that, you can put in your itemized deductions,” said McQuinn. “They take your adjusted gross income times 7.5 percent and then you get a number. However, Danny McQuinn with Advanced Tax Services in Lexington says if you spent a lot of money out of pocket, it could be worth itemizing these deductions in your federal tax return. For example, in order to claim a medical expenses deduction if youre in the 200,000-250,000 AGI range, this means that you had unreimbursed medical expenses for the year in excess of 20,000. When it comes to state tax returns, medical expenses aren't deductible in Kentucky. For taxpayers who racked up medical bills, some medical expenses not covered by insurance can be deducted. It’s also good to know what items are deductible. If you didn't ask for it in advance, hopefully you saved some of that money to pay the tax on your unemployment.”įarmer says if you got extra income from odd jobs picked up during the year, like Uber or Door Dash delivery, that money will also be taxed. “The state of Kentucky will hold up to five percent and the federal government will hold withholding out, but you had to ask for it in advance. “Hopefully you had withholding from your unemployment,” said Farmer. An Additional Medical Expenses Tax Credit (also known as an AMTC) is a rebate which, in itself, is non-refundable, but which is used to reduce the normal tax. Bill Farmer with HTI Tax Services in Lexington says if you're used to getting a W-2 form, you should now be on the lookout for a 1099-G form. If you received unemployment benefits, you will need to pay income taxes on that money. ![]() One of the biggest impacts of the pandemic was unemployment. If you received a distribution from a health savings account or a medical savings account in 2020, see Pub. It was a year that threw many curveballs that will change how people do their tax returns. Medical and Dental Expenses You can deduct only the part of your medical and dental expenses that ex-ceeds 7.5 of the amount of your adjus-ted gross income on Form 1040 or 1040-SR, line 11. (LEX 18) - Many people may never want to think about 2020 again, but with tax season approaching, we'll have to wait a little longer to say goodbye to the year completely. ![]()
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