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What you need to know about the May 17 tax deadline
I ran into the problem with the previous year's AGI. I caught the "$300 charitable deduction for non-itemizers" line on the form eventually too. Even in this FAQ, it generated some disagreement.
Full disclosure: I am not a tax attorney. I am not a CPA. I am not a paid tax preparer.
Personal Finance
What you need to know about the May 17 tax deadline
In this FAQ: Unemployment income, taxes due, the home-office deduction, and a problem with e-filing if your 2020 federal return has still not been processed by the IRS
By Michelle Singletary
May 16, 2021 at 11:57 a.m. EDT
Even in a normal tax season, the IRS struggles to answer people’s questions about their returns. This year, that outreach effort has been complicated by the coronavirus.
The problem is twofold. The federal taxing authority is grappling with a tricky tax year, one filled with virus-related provisions enacted by Congress to boost the economy. On top of that, the pandemic has strained the agency’s resources. Taxpayers are finding it harder than ever to reach the agency to find out what they can and cannot do.
{snip}
I tried to e-file but my return was rejected because the IRS hasn’t processed my 2019 federal return, which I mailed. The IRS can’t verify my adjusted gross income. What can I do?
Bronnenkant: The IRS has provided a great workaround for this issue through the “Special Instructions to Validate Your 2020 Electronic Tax Return” notice at irs.gov. The IRS says, “If your 2019 tax return has not yet been processed, enter $0 (zero dollars) for your prior year adjusted gross income (AGI). If you used the Non-Filers: Enter Payment Info Here tool in 2020 to register for an Economic Impact Payment in 2020, enter $1 as your prior year AGI.”
{snip}
Will the $300 charitable deduction for non-itemizers continue for 2021?
Bronnenkant: 2020 was the first year that allowed a $300 deduction for non-itemizers for cash contributions to charity. This will continue for 2021, where single people can claim $300 and married couples can claim $600.
Singletary: I also put the question to the IRS. Although the charitable deduction for 2020 and 2021 was for people who don’t itemize their deductions, they differ slightly, according to IRS spokesman Eric Smith. “The 2020 deduction was indeed above the line, that is, an adjustment to income that appears above the AGI line on the return,” he said. “The 2021 deduction is below the line. So it still reduces taxable income, but it doesn’t reduce adjusted gross income. For most people, this is a distinction without a difference, but for anyone who has something linked to AGI, it does make a difference, even if only a slight one.”
Correction: An earlier version of this column incorrectly said eligible educators can claim up to a $250 “above the line” credit for school expenses, including for pandemic-related protective items. It is a $250 deduction.
{snip}
Michelle Singletary Follow https://twitter.com/SingletaryM
Michelle Singletary writes the nationally syndicated personal finance column The Color of Money. Her award-winning column is syndicated by The Washington Post Writers Group and is carried in dozens of newspapers nationwide.
What you need to know about the May 17 tax deadline
In this FAQ: Unemployment income, taxes due, the home-office deduction, and a problem with e-filing if your 2020 federal return has still not been processed by the IRS
By Michelle Singletary
May 16, 2021 at 11:57 a.m. EDT
Even in a normal tax season, the IRS struggles to answer people’s questions about their returns. This year, that outreach effort has been complicated by the coronavirus.
The problem is twofold. The federal taxing authority is grappling with a tricky tax year, one filled with virus-related provisions enacted by Congress to boost the economy. On top of that, the pandemic has strained the agency’s resources. Taxpayers are finding it harder than ever to reach the agency to find out what they can and cannot do.
{snip}
I tried to e-file but my return was rejected because the IRS hasn’t processed my 2019 federal return, which I mailed. The IRS can’t verify my adjusted gross income. What can I do?
Bronnenkant: The IRS has provided a great workaround for this issue through the “Special Instructions to Validate Your 2020 Electronic Tax Return” notice at irs.gov. The IRS says, “If your 2019 tax return has not yet been processed, enter $0 (zero dollars) for your prior year adjusted gross income (AGI). If you used the Non-Filers: Enter Payment Info Here tool in 2020 to register for an Economic Impact Payment in 2020, enter $1 as your prior year AGI.”
{snip}
Will the $300 charitable deduction for non-itemizers continue for 2021?
Bronnenkant: 2020 was the first year that allowed a $300 deduction for non-itemizers for cash contributions to charity. This will continue for 2021, where single people can claim $300 and married couples can claim $600.
Singletary: I also put the question to the IRS. Although the charitable deduction for 2020 and 2021 was for people who don’t itemize their deductions, they differ slightly, according to IRS spokesman Eric Smith. “The 2020 deduction was indeed above the line, that is, an adjustment to income that appears above the AGI line on the return,” he said. “The 2021 deduction is below the line. So it still reduces taxable income, but it doesn’t reduce adjusted gross income. For most people, this is a distinction without a difference, but for anyone who has something linked to AGI, it does make a difference, even if only a slight one.”
Correction: An earlier version of this column incorrectly said eligible educators can claim up to a $250 “above the line” credit for school expenses, including for pandemic-related protective items. It is a $250 deduction.
{snip}
Michelle Singletary Follow https://twitter.com/SingletaryM
Michelle Singletary writes the nationally syndicated personal finance column The Color of Money. Her award-winning column is syndicated by The Washington Post Writers Group and is carried in dozens of newspapers nationwide.
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