FOR BREAKING NEWS VISIT WWW.QNS.COM FEBRUARY 11, 2021 • THE QUEENS COURIER 29
tax guide
Six common tax myths, debunked
As you look ahead to doing
your taxes this year, there are a
number of myths you may think
are true for the 2020 tax year. If
so, you are not alone - tax myths
and misinformation are more
common than you may think.
And unfortunately, these myths
can be costly if they lead to mistakes
on your taxes.
Here are the top six tax myths
this year:
Myth 1: Anyone working
at home can deduct their
home offi ce expenses
Just because you’re working
from home - as many taxpayers
are now - doesn’t mean you
can deduct the cost and expenses
of the space used for your
home offi ce. In fact, this deduction
only applies to people who
are self-employed. But, some
taxpayers may also be eligible if
they are employed by someone
else but use the space to engage
in self-employment activities.
Myth 2: You can claim
dependent exemptions
for your children
In the past, dependent exemptions
allowed taxpayers to claim
deductions for dependents (such
as children) on their federal tax
return. Unfortunately, dependent
exemptions are no longer a
thing. However, dependents are
still very important for tax benefi
t purposes, including increased
credits, child tax credits, fi lings
status determination and many
more benefi ts. Just not a simple
tax deduction as in the past.
Myth 3: You must itemize
to deduct charitable
donations
Th is was the rule in prior
years, but it changed for the 2020
tax year - you don’t have to itemize
deductions to take a charitable
donation deduction this year.
Under the CARES Act, you can
deduct up to $300 in charitable
donations made to IRS-approved
organizations when you take the
standard deduction. But if you
do itemize, you still get to claim
the deduction anyway.
Myth 4: You can fi le
taxes on a postcard
Th is is not true. When the
tax regulations were revised, you
may have read in the press about
a new “postcard” tax return, but
it was never true. Th e “form” that
was circulated to be like a “postcard”
is in fact two pages long,
plus three schedules!
Myth 5: You’ve already
paid taxes on your retirement
distribution
Just because you had taxes
withheld on your retirement or
IRA distributions doesn’t mean
you’ve fully paid taxes on it. Th is
is a very common misconception.
Th e income and withholding
are still reported on your
tax return, along with any other
sources of income you may
have, including Social Security
benefi ts if you receive them.
It’s important to gather all that
information together to discuss
with your tax professional
whether you may still have a tax
obligation for 2020.
Myth 6: There’s no longer
a tax penalty for not having
healthcare coverage
While the tax law went into
eff ect in 2020 to remove the federal
penalty for not having health
insurance as required under the
Aff ordable Care Act, you still
have a responsibility to reconcile
your advanced premium
tax credit when you have insurance
through your state’s Health
Insurance Marketplace. Plus,
some states do charge penalties if
you don’t have health insurance.
If you get healthcare through a
marketplace, you still may get
credits and must report it on
your taxes. Ask your tax professional
if you need help understanding
your healthcare coverage
as it relates to your taxes.
“If you have questions or concerns
about your taxes this year,
don’t wait until the last minute
to get professional help,”
advises Mark Steber, Chief Tax
Information Offi cer at Jackson
Hewitt Tax Services. “Making
errors on your taxes can cost
you both time and money - not
to mention stress and anxiety!
Work with a tax pro who is upto
date on all the latest changes
and can advise you on your situation.”
— Courtesy of BPT
/WWW.QNS.COM
