With all the challenges that we have faced this last year, it leaves many people in a completely different financial situation than they were in at the beginning of the year. COVID-19 has been devastating for many people and could leave them wondering where that leaves them as far as their taxes go. Mark Dicus & Company is here to talk about some changes that could have an effect on what your taxes look like this year.
The biggest change that many people have faced this year is a change in their income. While there are a few people that have seen an increase in their income, there are many more that have seen a decrease. If you have seen a significant increase or decrease in your income, it is sure to make a difference for your taxes this year. You may find yourself in a completely different bracket than you were in last year. If you are in a higher tax bracket, you could be facing higher costs that you haven’t experienced in years’ past. If you don’t withhold enough, you could owe the IRS money.
Unfortunately, there are many people that have faced unemployment this year. If you have gotten unemployment benefits during this time, you need to realize that it is all considered taxable income. You need to check with your accountant to make sure you don’t owe any taxes on that income.
Desperate times sometimes call for desperate measures. Many people have possibly found themselves in dire enough circumstances that they have needed to withdraw from their retirement account just to make ends meet. Under the CARES Act, this year citizens are able to withdraw up to $100,000 from their retirement and have 3 years to pay it back without getting penalized. This rule only pertains to the year 2020 and will be penalized if the amount isn’t paid back in the next three years.
Another change under the CARES Act pertains to student loans. All federal loan recipients have the option to temporarily suspend their payments. The interest rates on student loans have also been lowered to zero percent for the rest of the year. If you earn less than $70,000 a year individually or $140,000 if filing jointly, you can possibly write off up to $2,500 in student loan interest.
Tax Preparation, Filing, Planning & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you don’t have experience or training in tax preparation, it can be difficult to get the most out of your tax return. As you get ready to gather documents for the upcoming tax season, turn to the experts at Mark Dicus & Company to ensure you are getting everything you deserve. We know all the current tax regulations and all benefits that were enacted during this global pandemic. We can help you make sense of it all and make sure that you are ready to file. Call us today!