SIOUX CITY, Iowa (KCAU) — COVID-19 has affected almost every aspect of our lives and for some this year, that includes filing your taxes.
Susan McGuire, a VITA volunteer tax preparer for Center For Siouxland, navigates 2020’s tax returns.
“There are some different things that were going to include in your returns such as the two economic income payments. There is a spot we can enter the amount people received,” said McGuire. “If people did not receive them for one reason or another we can also answer ‘no’ and then somehow that should be refunded back to them through their tax return when they file their return.”
McGuire said knowing your economic impact payment amount will help make the process go smoother, as well as bringing your W-2 forms to your appointments.
“Unemployment is probably one of the things that’s going to be one of the biggest changes, everyone that was on unemployment because of COVID-19 received the extra 600 dollars a week and all unemployment benefits are taxable, so hopefully they had taxes withheld from their unemployment but if they didn’t that will go as part of their income and be considered taxable income,” said McGuire.
As for the self-employed, who have the ability to defer certain taxes. For those who lost their jobs during the pandemic, there’s another set of issues to be aware of.
One Siouxlander who is retired said he doesn’t think paying taxes this year will be different for him.
“It basically is the same it’s always been I don’t look at of it any differently. I’m retired so that may take some of the COVID-19 aspects out of it, but I plan on just doing it normal,” said Doug Strohben.
But for those retirees who did dip into their savings and retirement funds, they could face tax penalties if they used it for anything other than COVID-19 related expenses.
“People who took a distribution out of the retirement portfolio, for COVID related issues like they lost their job and they needed it to pay house bills or something like that; if they were not the minimum age to take that withdrawal they will not be charged the 10 percent penalty they normally would,” said McGuire.
If you are a permanent resident of Nebraska but work in Iowa, then you will need to file an Iowa non-resident state income tax return this year for your Iowa source of income. You will also need to file a Nebraska resident state tax return.
For those who worked from home in South Dakota this year, where there is no state income state, the way you file will be affected as well. Experts say to visit a tax professional if you have questions before the deadline, which is April 15.