The good news is that United States Secretary of the Treasury postponed the deadline for filing 2019 federal tax returns to July 15, 2020 with no penalties or interest due to disruptions connected to novel coronavirus (COVID-19). The bad news is that not all states have adopted three-month postponement (you can look up the specifics for your state here) and if all goes well, meeting professionals will be clipboard-deep in rescheduled events by mid-summer. Smart Meetings consulted the experts and put together some tips for getting your receipts in order during any down time.
Accounting for Layoffs
For those experiencing extreme slowdown as one of the 1.5 million people expected to file for unemployment benefits this week, Treasury Secretary Steven Mnuchin promised refunds are still going out within 21 days if you have one coming. Direct deposit is the fastest line between you and your money. Although the Internal Revenue Service is curtailing some operations during this period, it continues with mission-critical operations, including accepting tax returns and sending refunds. That means you might want to file earlier rather than later to help cover the loss.
Independent planners and vendors were also included in the extension. Self-employed individuals can defer for 90 days up to $1 million for tax year 2019 federal tax payments. This also applies to tax year 2020 estimated tax payments previously due on April,15.
You can use the extra time to calculate the WFH deduction for working from home. It can be calculated in two different ways. First figure the percentage of your home’s square footage that you use “exclusively and regularly” for business-related activities. Multiply your mortgage or rent by that that percentage to get your deductible. A home office that takes up 5 percent of your house’s square footage equals a 5 percent of housing expenses deductible. Alternatively, you could deduct $5 per square-foot of home used for business, up to 300 sq. ft., about a 17-by-17-foot space. That is the simplified option. But while you have time, why not pencil it out and see what works best?
Ongoing Education Credits
If you are using time that would otherwise have been filled with traveling to events to binge educational webinars and position your career for the upside, that might be deductible as well. The costs of “qualifying work-related education,” including things such as tuition, books and supplies to maintain or improves skills needed in your present work could fall under 970 tax benefits.
Additionally, the Lifetime Learning Credit allows you to claim 20 percent of the first $10,000 you spend at an “eligible educational institution.” Earning maximums apply.
A Healthy Test
The IRS is also making accommodations for including testing and treatment under federally recognized healthcare plans. Anyone with a high-deductible health plan (HDHP) will be covered for COVID-19 testing and treatment even before deductibles have been met without losing status.