Unemployment, stimulus payments, working from home and even that side income are few of many things that may impact the way taxes will be filed this year.
In this article we will cover the impact of pandemic on tax filing and other topics for tax year 2020.

Unemployment
Unemployment income is taxable, and you must report this income in your tax return. You will receive form 1099-G from the Department of Labor and Unemployment which shows the total amount of payments for the calendar year.

Unemployment payments may have a little bit of an impact on your tax return depending on income tax withheld amount on those payments, and any other income you may report in your tax return.

Stimulus payments
Stimulus payments are NOT taxable, but you do need to check the amount of cash you received because you may be entitled more.
IRS does not know about life changes such as a new child, dependent status, or significant change in income. If you received stimulus payments and you think you were entitled more, you can request the difference in your 2020 tax return.

Side Income as Self-employed
Those who picked up a side hustle may owe even more. If you are a self-employed gig worker, income that you are earning is taxable and you are responsible for paying those taxes.
Make sure you gather all your income and expense receipts and prepare an accurate profit and loss statement to include in your tax return. Always keep in mind, you are responsible to provide expense receipts if asked by IRS.

Working from home due to coronavirus. Is home office deductible for employees?
If you are a full-time employee of a company and receive form W-2, you are NOT eligible to take the home office deduction or any of those unreimbursed business expenses unless you fall into one these employee categories.
•Armed Forces reservists
•Qualified performing artists
•Fee-basis state or local government officials
•Employees with impairment-related work expenses

Stock market and crypto currency transactions
If you sold stocks or crypto currencies, those transactions are taxable, and you need to report them in your tax return. You may receive form 1099-DIV, 1099-INT, 1099-B, or 1099-K.
If you did not receive 1099 for your crypto currency transactions, you still have to report those in your tax return and you are responsible for paying those taxes.

Gather your tax documents
Make sure you receive all the tax documents such as W-2, 1099s, 1098s before you file your tax return. Those forms are reported to IRS under your social security number. If you do not report all the tax documents, this will cause delays and changes in your tax return.
If you had healthcare marketplace coverage and you received form 1095-A, you need to report it in your tax return and file Health Insurance Premium Tax Credit form. If you do not report 1095-A, expect delays on your IRS process and refund.

File Electronically
The fastest way to get your refund is to file electronically and then requesting your refund directly deposited into your bank account.
If you owe taxes and cannot pay in full, you still have to file timely. You can apply for installment agreement after you file your tax return.

Disclaimer
This article is intended for informational purposes and should not be taken as legal or tax advice. You must consult with your tax, financial or legal adviser about your unique financial situation before acting on anything discussed in this article. TaxBasket LLC is providing informational content for general guidance to help small business owners become more aware of certain issues and topics and this article must never be considered as a substitute for advice provided by your tax, financial or legal advisers. TaxBasket LLC or its members cannot be held liable for any use or misuse of this content.