Covering Your Assets: Year-end tax-planning planning primer

by Mike Bosma

Mike Bosma

As an extension of last week’s column regarding tax planning, I thought it would be helpful to hit some of the nuances for the 2020 tax year that may surprise you come April 15, 2021, when you file your taxes.

In fact, the upcoming filing season is going to be trickier for many taxpayers due to high unemployment, working from home and general upheaval due to COVID-19.

Here are a few COVID-19 tax related-issues of which to be aware.

UNEMPLOYMENT

Unemployment benefits are taxable income, which will surprise some filers. Workers are not required to have federal taxes withheld from their benefit payments. While people have the option to have the tax withheld, many do not.

It’s worth noting that unemployment benefits are all subject to federal taxes, but not all states tax it. The good news is that Nevada doesn’t have a state income tax (at least for now).https://96efb7943c9e7e76a20d5adc293a9891.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html

Taxpayers who unintentionally do not include unemployment income on their taxes will get a “love letter” from Uncle Sam with the tax due, plus penalties and interest charged by the IRS.

Read the entire article in the NNBW: https://www.nnbw.com/news/covering-your-assets-2020-tax-year-nuances-that-may-surprise-you-voices/