We work with individual clients on filing tax returns to the IRS, State and Local City Municipality.
This Year more than ever tax return filings with the IRS are even more complicated because of the CARES ACT and the other tax law changes due to COVID 19. You should have the help of a professional tax preparer to make certain your return is correctly filed.
Some of the important changes include a few items which taxpayers may not have experienced in the past such as the following:
Ohio Unemployment Compensation Is Taxable
If you received unemployment compensation from the State of Ohio then it is subject to both federal income tax and state income tax. The total amount of the unemployment that you received must be reported on your Form 1040 to the IRS and on your Form IT-1040 to the State of Ohio.
However, unemployment compensation is not subject to city income tax within the State of Ohio. You do not have to report any unemployment compensation to RITA or any other taxing municipality.
All individuals who received unemployment compensation will receive a 1099 G that they will need to complete their tax return. This 1099 G will detail the total amount of the unemployment compensation received and whether any taxes were withheld.
Stimulus Payment 1 and 2
If you did not receive either your first or second stimulus payment or you did not receive the correct amount, then when you file your 2020 federal tax return form 1040 you maybe able to claim a tax credit.
The First Stimulus Payment (EP1) was based upon either your 2019 adjusted gross income or your 2018 adjusted gross income. If the IRS had not received and processed your 2019 tax returns when the stimulus payments were being processed, then the IRS would have used your 2018 AGI to determine your stimulus payment.
Charitable Contributions Made in 2020
Prior to the CARES ACT you could only deduct charitable contributions if you itemized your tax deductions. Under the CARES ACT, taxpayers who don't itemize deductions may take a charitable contribution of up to $300 for cash contributions made in 2020 to qualifying organizations. This applies only to cash contributions and not to non-cash contributions.
Other Taxpayer Relief
An individual can make an election to use either their 2019 or 2020 income to figure their additional child tax credit for 2020. The additional child tax credit is a refundable tax credit and is based upon the individual's income. For 2020 this tax credit can be worth up to $1,400.00
If you want a tax professional to help you with your 2020 tax filings, call our office at 440-572-3420 and we would be happy to discuss your situation with you.
