The Covid 19 pandemic has induced intense economic problems anywhere withinside the world. Millions of people have lost their jobs and finances are in deep turmoil. This has affected the procedure for the collection of income taxes as well, because if there is no income then where will the income tax come from. A lot of governments have allowed extensions to the deadlines for the filing of income taxes. However, income tax is a crucial aspect of personal finances and it is essential that you make your income tax payments on time. In this respect, a lot of people have several questions regarding the income tax filing process for this year. This article will deal with some of these essential questions which will help you file your income tax.
Is any form of payment considered as taxable income today?
Despite the utter lack of jobs, people still are doing something or the other to earn some money. This puts forth the question whether any form of payment that they receive is eligible for taxation today. To be clear, the financial impact payments that people receive from the government will not be considered as income and people do not have to pay any taxes on it. Government funds will not affect a tax payer’s refund and will not increase their tax amounts when they file their tax reports. However, income generated from other sources which cross the set brackets will be considered as taxable. Only government payments are non-taxable and do not affect any tax payer’s taxable income. Thus, federal government assistance programs and benefit funds are not eligible for taxation.
Getting a lower amount in government assistance funds
A lot of people who are currently eligible for government assistance programs have received amounts smaller than what they had expected. In case, you had filed the previous year’s tax returns and yet it was under procession during the calculation of the government assistance fund disbursements then it can be possible that you have received a payment based on your tax returns for 2018 instead of 2019. However, if this is the case then you will refunded the additional money which is owed to you when you are filing your tax returns in the next year.
In the event that you had received any government assisted funds this year then you do not have to pay it back next year. However, this does not include funds received for other reasons like still sent checks or any other benefit program. These amounts will have to be returned.
Filing the tax returns jointly
In the event that you are a married person and would like to file the tax return jointly, then you will need to check if you had received the whole government payment to a single account or not. The reason for this is that the rules state that the total payment would have to be divided between both the couples. Thus, in case you did not receive an equal share then you will be able to claim the rest from your partner’s account. Consequently, in case you had received more than your half then you will need to pay the balance amount to your spouse or get taxed for the extra amount.
The IRS understands that the present financial year is difficult and has considerably damaged the finances of millions of people and hence, offers a lot of tax benefits and government aided schemes to lighten the income tax burden on people. The IRS has already extended deadlines for filing tax returns for this very purpose.
In case you are unsure of how to calculate your income tax, then you may consider hiring the services of professional tax advisors. You may also use an online Income Tax Return Calculator to help you calculate your tax returns. These online tools have a lot of sophisticated features which can help you quickly assess your tax returns.
Filing income tax returns in the proper procedure is essential for everyone. Hence, it is recommended to use the services of professional tax advisors who can guide you to file your tax returns properly and also help you get more tax deductions. Hopefully, the information mentioned in this article will have helped you.