It’s Not Too Late To Claim Your $1,200 Stimulus Payment

Earlier this year, the government issued roughly 160 million Economic Impact Payments — or stimulus checks — to eligible Americans. The problem is, some people have fallen through the cracks and are still awaiting the first much-needed COVID payment.

If you are in this category and have yet to receive your check, you can claim it on your 2020 taxes. Claiming the payment you were eligible for will lower your tax bill and may result in a cash refund. You will receive it in the form of a Recovery Rebate Credit on your taxes.

Qualifications For A Recovery Rebate Credit

Individuals who are a U.S. or permanent citizen, have a social security number, make less than $99,000 a year and are not claimed as a dependent on someone else’s tax return in 2018 or 2019 likely qualify for the Recovery Rebate Credit.

The exact amount depends on your adjusted gross income. If you are filing single with an average gross income of $75,000 or are a single parent with an adjusted gross income of $112,500, you are eligible for the full amount. Also entitled to the full amount are married couples with a combined adjusted gross income of $150,000 or less.

For every $100 more than the adjusted gross income, the payment is reduced by $5 until it reaches a threshold of $99,000 for single users, $136,000 for heads of household and $198,000 for married couples filing jointly.

So it’s possible that single filers would have been eligible for $1,200 plus $500 for each qualifying dependent; and married couples filing jointly could have been eligible for $2,400 plus $500 for each qualifying dependent.

How To Claim Your Money

According to the IRS, you can claim your Recovery Rebate Credit on your 2020 Form 1040 or 1040-SR. If you received a partial payment, you will need to reference the IRS’s calculated amount from the “Notice 1444 Your Economic Impact Payment” letter when you file. You can also claim any missing payments for a dependent child.

Depending on the amount of stimulus money you’re eligible to receive, your money will either show up on the 2020 tax return as an additional refund, or the amount of tax you owe will be lowered.

We understand that most individuals find the details and nuances of tax season confusing, particularly during unprecedented years like 2020. When you are ready to file your 2020 tax return, reach out to Donohoo Accounting Services. Working with our tax professionals will save you time, frustration and headaches. We would be happy to schedule a complimentary consultation to help you get the cash relief you are entitled to. Give us a call today at 513-528-3982! For more tips and our latest updates, check us out on Facebook, Twitter or LinkedIn!

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6 Tips For Homeowners To Maximize Their Tax Deductions

Owning a home is one of the biggest investments most people make in their lifetime. Being aware of tax deductions and other credits available will give this big purchase every opportunity to pay you back a little come tax time. Here are six tips for homeowners to maximize your tax deduction:

Tip #1: Be Organized

Keep detailed records of your home-related expenses, financial documents and receipts. Most federal income tax deductions and credits require a paper trail, so the more organized your records are, the easier the process will be and the more likely it is that nothing will be missed or forgotten.

Tip #2: Deduct Your Mortgage Interest

If your mortgage is less than $750,000, you can deduct the interest you pay on the loan for no more than two residences. This could be your primary residence, summer home, or even a boat if it has plumbing or a bathroom. You can also include interest you may have paid when you closed on your home.

If you own more than two properties, be sure to use the deductions from the property that will give you the largest tax deduction — it may not necessarily be the property with the biggest mortgage payment.

Tip #3: Deduct Your Home Office Space

If you work from home in a dedicated space, you can deduct that space on your taxes. The current tax law allows you to deduct $5 for each square foot of office space, up to 300 square feet. This law has been taken advantage of by some, which is why it has earned a reputation of being an audit trigger. Make sure the space you deduct is exclusively used for your business or side hustle.

Tip #4: Deduct Your Property Taxes

With the Tax Cuts and Jobs Act of 2017, deducting your property taxes is still possible but not as flexible as it once was. You can now deduct up to $10,000, and that includes a combination of state and local tax deductions and state and local property tax deductions.

Tip #5: Consider Energy Efficient Upgrades

Tax incentives have changed for these types of upgrades, but some are worth looking into. Purchases for electric and water heating equipment, solar panels, rain barrels and drought tolerant landscaping may apply. Make sure to do your due diligence and triple check the specific requirements and deadlines for these green projects.

Tip #6: Age-In-Place Deductions

If you plan to live in your residence as you get older, you may be able to deduct expenditures for home improvement projects that will assist you as you age. Upgrades such as wheelchair ramps, lowering cabinets and electrical fixtures, and installing bathtub grab bars may qualify.

Donohoo Accounting Services is here to help you understand the IRS rules and determine the types of tax deductions you may be eligible for. With more than 20 years of experience in the business, we can help you reduce your tax burden by finding every deduction possible. If you would like to set up a free consultation, contact us at 513-528-3982. For more tips and our latest updates, check us out on Facebook, Twitter or LinkedIn!

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