ASK THE EXPERT

ask the expert Looking at COVID-year Taxes

We know 2020 was the longest year ever and, among other things, the IRS won’t let us forget it either. Following are some things to consider as you prepare your returns. Be sure to consult a tax professional for a careful review before filing, particularly if any of these situations apply to your tax situation.

 Unemployment: Federal unemployment compensation is taxable and must be reported on a federal return (1099-G). Any of the special unemployment compensation authorized under the

Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in Spring 2020, is taxable. m Includes any who received federally funded unemployment benefits, including those not traditionally covered (self-employed, independent contractors, and gig workers). m Funds received from Williamson County under the CARES Act (WilcoForward grants) is gross income taxable to a business. Sole Proprietors will receive a 1099-NEC from the County. Gig work: If you picked up a side job for cash and netted more than $400, you must include it on your tax return as self-employment income. Make sure to note qualifying expenses that may reduce your net revenue and tax obligation (mileage, equipment, etc.). EIC: Families who received unemployment income should also note, with regard to the earned income tax credit and the child tax credit—unemployment benefits are taxable, but not considered earned income.

Under normal circumstances, receiving unemployment would result in a reduction of both credits when you file your tax return. Stimulus 1: Stimulus payments received from the government are not taxable. The IRS does not consider it income and it will not affect your refund or tax owed. Stimulus 2: If you believe you were eligible for the

Round 1 and Round 2 Stimulus payment, but did not receive what you expected, or received none at all, you can claim a Recovery Rebate Credit. E.g., if your income was lower in 2020 than 2019, you may be owed a partial credit. Or, if you were claimed as a dependent on someone else’s tax return in 2018 or 2019 but won’t be for 2020, you may be eligible for the credit. PPP Loans: The CARES Act says the forgiven loan amount is not included in taxable income. The December 2020 stimulus plan does allow you to deduct allowable expenses paid with PPP funds. Retirement Account: If you took a CARES Act 401(k) or IRA distribution in 2020, you can report all of the income on your 2020 tax return, or in equal installments over three years. You may also recontribute money back into a retirement account and undo the tax consequences of the distribution. Note: For 2021, the rules returned to standard hardship and standard plan loan rules.

Charity: If you made cash gifts to charities in 2020, there is a new $300 above-the-line charitable donation deduction per tax return. That means that even if you take the standard deduction and don’t itemize, you can take the $300 charitable deduction. Just make sure you have receipts for your gifts; under $250 you can use credit card statements or cancelled checks. For gifts of $250 or more, you need a written acknowledgment from the charity. Winter Storm Uri Extension: The IRS announced extensions for Texans in the federal disaster area. Individual returns, Partnership and S Corp annual filings, fourth quarter estimated payments, quarterly payroll returns, and 2020 IRA contributions are now due June 15.

FREE TAX ASSISTANCE

The Volunteer Income Tax Assistance (VITA) program of United Way is available to wage earners earning $57,000 or less. IRS-certified volunteers provide basic return preparation with electronic filing to qualified individuals.

2021 Board of Directors & Staff

• Daniel Duckworth - President • Mary Clare Spear - Vice President & Director of Recruitment & Retention Committee • Mariella Norman - Treasurer • Sabrina Jordan - Secretary • Kim Sanders - Director of Community t t t Connections Committee • Dax Oglesby - Director • Ginger Trevino - Director • Jared King - Director

• Kelly Michael - Executive Director execdirector@libertyhillchamber.org 512-548-5533

Liberty Hill Chamber of Commerce Membership Levels

PLATINUM LEVEL - $575 (TOTAL VALUE $845)

Free Ribbon Cutting & Publish on Front Page of Local Paper/Social Media ($150) Chamber Plaque ($60) • Six Tickets to Lunch & Learn ($60) Six Months Free Banner Ads ($300) • Enhanced Listing in Online Chamber Member Directory ($60) • Additional Branch Listings ($10/Listing) Logo with Website Link in Weekly Newsletter ($20) • Promotional Flyer or Brochure in Visitor Guide Packets ($25) • Free Event & Job Postings on Website/Newsletter ($100) Discount to all Chamber Events & Networking ($60) • Lunch & Learn Sponsor Materials Displayed in Visitor Center Lobby • “Proud Member” Digital Icon • “Proud Member” Decal GOLD LEVEL - $300 (TOTAL VALUE $620)

Free Ribbon Cutting & Publish in Local Paper/Social Media ($100) Chamber Plaque ($35) • Four Tickets to Lunch & Learn ($40) Four Months Free Banner Ads ($200) • Upgraded Listings in Online Chamber Member Directory ($50) • Business Recognition in Weekly Newsletter ($10) Promotional Flyer in Visitor Guide Packets ($25) • Free Events & Job Postings on Website/Newsletter ($100) • Discount to all Chamber Events & Networking ($60) Lunch & Learn Sponsor • Materials Displayed in Visitor Center Lobby “Proud Member” Digital Icon • “Proud Member” Decal BRONZE LEVEL - $150 (TOTAL VALUE $270)

Listing in Online Chamber Member Directory ($50) Free Events & Job Postings on Website/Newsletter ($100) Discount to All Chamber Events & Networking ($120) Materials Displayed in Visitor Lobby “Proud Member” Digital Icon • “Proud Member” Decal