The deadline to file taxes for 2020 is May 17, and while the IRS pushed back the deadline an extra month for individual tax returns due to the coronavirus pandemic, some residents are still behind on filing their taxes. A survey from IPX 1031 found that a third of Americans procrastinate on filing their taxes.
Between medical expenses, charitable donations and new work-from-home purchases that popped up as a result of the pandemic, many people may be missing out on refunds they didn’t know they qualified for.
Laura Gonzalez, associate professor at the Finance College of Business at Cal State Long Beach, said the school’s volunteer tax-support program helped families receive tax refunds worth more than $1 million for their 2019 taxes last year.
Here are some ways you can get money back on expenses and donations made in 2020.
The pandemic forced many employees to work from home. Is the new office chair considered a work expense and can be written off? That depends, says Gonzalez. If the equipment is in a home or small office registered under an LLC license, then those expenses can be deducted, which includes everything from internet bills to receipts for new equipment.
In general, deductible medical expenses include payments necessary in order to diagnose, prevent, or treat illness, according to a report from TurboTax, which includes visits to the doctor, dental exams, X-rays and birth control pills prescribed by a doctor. Mental health check ups also qualify, as well as rehabilitation costs related to drug and alcohol addiction.
The cost of insulin and prescription drugs can also be deducted, however, not over-the-counter medicines. The IRS also announced that amounts paid for PPE such as masks and hand sanitizer, with the primary purpose of preventing the spread of coronavirus, can be claimed as a medical expense.
If an employer reimburses medical expenses, that cannot be deducted. It has to be an “out of pocket” expense.
Gonzalez added that expenses for childcare services as schools shut down should also be recorded and provided when filing taxes for a deduction.
Gonzalez said donations made in 2020 can help increase people’s tax returns.
For example, donating those nice dress pants for the office that became obsolete can be deducted as a donation, Gonzalez said, as long as the nonprofit or organization can provide a form and a receipt of the donation is attached.
Donations made online can also count toward tax deductions. A screenshot of the online receipt for the donation should be enough proof, Gonzalez said.
To prepare for 2022 tax filing deadlines, Gonzalez said the university’s Volunteer Income Tax Assistance IRS program provides free income tax preparation to low-income, students, the elderly, non-residents and limited English proficiency individuals.
“Almost getting in the middle of 2021, it’s important to plan for next year,” Gonzalez said. “People should consider opening an LLC and keep track of any donations.”
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