3 New Tax Credits For The 2020 Tax Year
Updated: Apr 1
The American Rescue Plan, enacted on March 11, 2021, excludes from your income up to $10,200 of unemployment compensation paid in 2020 for tax returns with adjusted gross income less than $150,000. If married, each spouse receiving unemployment compensation gets the exclusion.
If taking the standard deduction, taxpayers can take a charitable deduction of up to $300 for cash contributions made in 2020. Normally, taxpayers who take the standard deduction do not itemize their contributions, but rather take the $12,400 deduction if single ($24,800 for Married, and $18,650 for Head of Household). But this year, even if you take the standard deduction, and you are a giving person, you can deduct up to $300 of those donations on your tax return.
You may also be eligible for the Recovery Rebate Credit. Meaning, if you qualified for the stimulus checks, but did not receive them, or you received an improper amount, you can claim that on your tax return and earn that money through credits off your tax bill.
If you have any questions on if you qualify for these credits, or how to take advantage of them on your tax return, drop a line to firstname.lastname@example.org.