The American Rescue Plan Act of 2021 includes a retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable.
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The Treasury Department and Internal Revenue Service announced on March 17, 2021 that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021.
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The Economic Impact Payments were an advance payment on the Recovery Rebate Credit, a tax credit against your 2020 income tax. Generally, this credit will increase the amount of your tax refund or decrease the amount of the tax you owe. You may be eligible to claim the credit by filing a 2020 1040 or 1040-SR. The Recovery Rebate Credit is authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the COVID-related Tax Relief Act.
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Many drivers for ride-sharing companies are considered independent contractors for tax purposes. Drivers will receive Form 1099-NEC, Nonemployee Compensation, or Form 1099-K, Payment Card and Third Party Network Transaction, or both, from the ride-sharing company by January 31 for year 2020. The drivers are required to report and pay taxes on all income received from the ride-sharing company.
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Understanding how tax brackets work, as well as which bracket you are in, can help you make better informed financial decisions and determine the amount of tax due or refund with reasonable accuracy.
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Having a baby and adopting a child are joyous occasions in life. Most events such as welcoming a child have tax consequences that occur during the year that can affect your tax situation. Many parents can claim tax credits to offset the amount of tax they owe after having a child, and each credit comes with specific qualification requirements.
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