EYEWITNESS NEWS (WBRE/WYOU) — Turning the calendar means it may be a good time to start financial planning for the new year now before getting a big tax bill.
A survey shows 53 percent of people working from home plan to take a ‘home office tax reduction’, but they may not qualify. Experts also say the stimulus checks are not taxable, and you will not have to pay taxes on them.
But, unemployment benefits are taxable and anyone who collected, but did not withhold, will be impacted in April.
“Only if you are self-employed or have a home business are you allowed to deduct a home office. If you’re just working at home for the convenience of your employer, like I do many days, that is not a home office deduction, but many taxpayers think it is,” Jackson Hewitt’s chief tax information officer Mark Steber said.
Experts also say some taxpayers will receive smaller paychecks in 2021, because taxes that were relaxed during the pandemic are returning.