Healthy, Wealthy
& Wise
Pandemic Prompts Tax Changes for 2020
ANDY GOTLIEB | JE MANAGING EDITOR
WHILE THE PANDEMIC’S
created heartaches
and headaches galore for everyone,
taxpayers may fi nd themselves
benefi ting a bit when they go to
fi le their 2020 returns.

Th at’s especially true if
you live in the suburbs and
normally work in Philadelphia,
but instead spent most of the
year working from home, said
Caryn Nelson, a West Chester-
based CPA. You will be able to
claim a credit for those days
at home from the 3.5% wage
tax Philadelphia levies on
nonresidents. As always, numerous
changes occurred to the tax
code, especially for businesses.

“As far as regular changes,
there aren’t many more than
usual, but there are many
related to COVID,” Nelson said.

“It’s no diff erent this year
than any other, except we’re
working from home and
setting our own hours,” agreed
Michael Casey, a CPA with
Savran Benson LLP in Bala
Cynwyd. Here are a few things to
know, according to local
CPAs. As always, check with
your own accountant to
see how the changes might
impact you.

• Th e standard deductions
increased. For a single
person, it increased $200
to $12,400 and grew $400
to $24,800 for a married
couple fi ling jointly. Th ose
who fi le as head of house-
hold now get $18,650, up
$300. Th e income brackets
increased as well.

• Stimulus checks do not
count as taxable income.

However, if you didn’t
receive payments or may
have received the wrong
amounts, you might be able
to claim the diff erence for a
refund. • Th e required age for taking
minimum IRA distribu-
tions climbed to 72 from
70½. And those over 70½
who are still working can,
for the fi rst time, make a
contribution to their IRA.

Th ere also were no required
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As far as preparing to have your tax return
done, the usual advice applies about not
waiting until the last minute, especially with the
IRS likely facing a backlog. Staying organized is
more important than ever.

• •
• •
• •
minimum IRA distribu-
tions for 2020.

Th e CARES Act allows
withdrawals of up to
$100,000 out of IRAs and
401(k) for those under 59½
without the usual 10%
early withdrawal penal-
ties if hardship can be
demonstrated. For those not itemizing,
t here is a new $30 0
deduction for charitable
contributions. In addition,
the normal limit of 60% of
adjusted gross income on
deductions is potentially
suspended. Payroll Protection Program
loans are forgivable and tax
free for the IRS.

There’s 100% deduct-
ibility for meal expenses,
compared to only 50% in
prior years, as a way to help
restaurants. The mileage deduction
for self-employed people
dropped from 58 cents per
mile to 57½ cents.

If you’re self-employed there
are new sick leave and family
credits available to apply for
if you couldn’t work because
of COVID-19 or cared for
someone ill from it.

JEWISHEXPONENT.COM electronically,” he said, as a
means of having a receipt,
receiving refunds faster and
the chance to avoid penalties.

Bookman said there is still
reluctance on the part of some
taxpayers, who don’t want
key information like Social
Security numbers and bank
account numbers submitted
• The medical expense to do this year is absolutely, electronically, to go the paper-
deduction, which was if you can, fi le your return less route, but he’s never
supposed to jump to 10% of
a recipient’s adjusted gross
income, remains at 7.5%.

As far as preparing to have
your tax return done, the
usual advice applies about not
waiting until the last minute,
especially with the IRS likely
facing a backlog. Staying
organized is more important
than ever.

“They are significantly
behind in everything they’re
doing,” Nelson said, noting that
extensions she fi led by mail last
July weren’t even opened until
November. Th e IRS recently announced
that it won’t begin accepting and
processing individual income
tax returns until Feb. 12, Th e
New York Times reported.

Usually, it begins that process
in late January. Do note that
even though the fi ling deadline
was pushed back three months
in 2020, the fi ling deadline
remains April 15.

Jeff Bookman, a Bala
Cynwyd-based CPA, recom-
mended keeping as many
electronic records as possible.

“What I really tell people
experienced any problems with
the method.

As far as 2021 goes, stay
tuned; the accountants expect
taxes to increase — just not to
what extent.

“With the new administra-
tion, we won’t know what the
landscape will be,” Casey said. ●
agotlieb@jewishexponent.com; 215-832-0797
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JANUARY 28, 2021
17