Third Stimulus Check: Stimulus checks, unemployment? 2020 tax tips ahead of May 17
MILWAUKEE – From lost wages to a bonus check from the government, finances have been up and down for many people over the last year. While your income may have changed during the coronavirus pandemic, what remains constant is taxes.
2020 was a year that hit many like no other.
“It’s affected so many people’s lives and particularly their finances. A lot of people are struggling due to COVID,” said Margi Mannix, a vice president at AARP.
The pandemic is now contributing to one of the most complicated tax seasons.
“There’s a lot of confusion,” she said
Mannix has been straightening it out for people, sharing what we need to know for filing after life changes, such as if you lost a job and filed for unemployment.
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“Yes, those unemployment benefits are taxable,” she said.
But what about the economic stimulus payments meant to give folks a boost?
“The good answer is, no they are not,” Mannix said.
Mannix said while 3 million people in Wisconsin did get economic stimulus payments, nationwide, about 10% of people did not. If you think you are missing stimulus money or did not get what you are entitled to, you can claim it on your 2020 tax return in the form of a recovery rebate credit.
“It’s a special tax credit. Depending upon your income, of course, it can reduce your taxes dollar for dollar. It may not only reduce your taxes, but could produce a refund depending on your income,” she said.
She’s also walking older folks through the process who now may be handling finances on their own for the first time
“The widow or recent widower might not know that there is an additional standard deduction if you are over 65 years of age,” said Mannix.
Help sorting it all out can even be free if you qualify, the AARP Foundation and the IRS both have a free file program. With all of the extra circumstances, at least there’s extra time as the deadline has been pushed back to May 17.
For more help with filing your tax return, check out these resources.