Actions

Answering your tax questions about working from home, donations & stimulus payments

Posted at 5:09 PM, Dec 22, 2020
and last updated 2020-12-22 18:45:19-05

(WXYZ) — Thinking about taxes can be a taxing ordeal. While connecting with you on social media, many of you told our Ameera David about the big questions weighing you down as we close out the year and head into a tax season like no other.

Laurie from Royal Oak wanted to know if you can claim any household utilities or rent since you're working from home.

That question is a top one with thousands of metro Detroiters forced to turn their home into an office this year.

"Unfortunately, as an employee, working from home, there aren't a whole lot of deductions that you can take advantage of," CPA Matthew Kidd said.

Remember that tax reform law that went into effect two years ago? As a result, W-2 employees are no longer eligible to deduct home office expenses.

But, Kidd said that shouldn't stop you from asking your work for equipment or expense reimbursements.

On the other hand, if you're a 1099 Contractor working primarily from home, consider writing off utilities, rent, real estate taxes and home repairs.

But taxpayer beware, if you chose to work during the pandemic from a different state, you may get double-taxed. Many states in the Midwest have reciprocity agreements.

If you worked in Illinois, Indiana, Kentucky, Minnesota, Ohio and Wisconsin, you should only get taxed once.

Meantime, Chuck in Southfield says he's most concerned about stimulus payments.

"Will that money have to be claimed on our 2020 tax return?" he asked.

Those payments are not included in gross income and are not taxable.

Keep an eye on Washington to see if there’s a second round of stimulus that comes out because it’s likely to impact taxes in one way or the other.

As for charitable contributions, here's the Rebound Rundown.

New this year, non-itemizing taxpayers can deduct up to $300 in donations. Donations must be made by Dec. 31, 2020.

Check the special tax exempt organization search tool on IRS.gov to make sure the group you donate to is eligible.

One other note, unemployment income is taxable. If you're worried or confused about how much you owe, make sure to reach out to a professional

Additional Coronavirus information and resources:

View a global coronavirus tracker with data from Johns Hopkins University.

See complete coverage on our Coronavirus Continuing Coverage page.

Visit our The Rebound Detroit, a place where we are working to help people impacted financially from the coronavirus. We have all the information on everything available to help you through this crisis and how to access it.