More At Stake Than Just New May Deadline When It Comes To Taxes
HARRISBURG (KDKA) - April 15 is traditionally Tax Day, but not this year.
For the second year in a row, both the federal government and Pennsylvania have changed the deadline for filing tax returns.
That's just one of many changes taxpayers need to know.
"2020 as a tax year was kind of one of the biggest tax law changes year and life changes years we've seen in decades," says Mark Steber, chief tax information officer for Jackson Hewitt Tax Service.
There's a reason May 17 is the new deadline for filing 2020 federal and state tax returns.
"I think the IRS just recognized that people may not have all of their information in a timely manner so they decided to push it back to give everyone a little bit of a buffer," Duquesne University tax professor Bryan Menk told KDKA money editor Jon Delano on Thursday.
In the midst of a pandemic, 2020 was a confusing year with most taxpayers getting two stimulus checks.
Delano: "The stimulus checks that you may have received in 2020, are they taxable?"
Steber: "Great question, and the simple answer is no."
Not taxable. That's true for both the feds and the state, says Steber.
But unemployment compensation is different, says Menk.
"You received unemployment benefits last year, the first $10,200 of that is tax-free," says Menk.
"Now that's tax-free at the federal level, but not at the Pennsylvania state level. Pennsylvania state still considers that to be taxable income."
Another question. Did you work from home last year?
"People working virtually from home, you may have a home office deduction if you have a home office business. You don't qualify if you're an employee but that can be confusing," says Steber.
In other words, if your company sent you home to work and get a W-2 as an employee, you cannot claim a home office deduction. But if you were laid off and started working for yourself out of your home, you might get that deduction.
Of course, the self-employed pay more taxes.
"You are responsible for paying all of it – and that's 15.3 percent for the social security and Medicare plus your federal plus your state," says Menk.
Remember, while you can still get an extension to October 15 to file tax paperwork, you must pay all your taxes due by May 17 to avoid interest and penalties.
If you need help doing your taxes, you can always use a tax service or you can check out the free help resources available here.