Jackson Hewitt Interview GDK 031921

Brett Edwards talks with Mark Steber, Chief Tax Information Officer at Jackson-Hewitt about amending possible mistakes on your tax returns.

C1 3 sometimes that happens to be on your tax return.

Joining us today is mark steber, chief tax information officer at jackson hewitt to show us the things we need to know about amending our tax returns.

Welcome to the show, mark.

Mark steber: hey brett.

Good to be here.

Brett edwards: so mark, there is a new rule that americans should be aware of called the eitc lookback rule.

Can you kind of explain that for our viewers?

Mark steber: well, and really simply right at year end, our elected officials recognize that a lot of people had less income in 2020.

Lay offs, unemployment, sequestering took a hit on a lot of people's earnings.

Well, several credits earned income credit, child tax credit, and some others are based on how much income you earn during the year.

So with less income, the government figured there was going to be a lot of people with less credits and in a time where they actually need more benefit.

So they passed the lookback rule, which basically says you can use the 2020 income to calculate your earned income credit or you can look back to 2019s tax return and take the bigger of the two in calculating your credits this year.

So you can look back to 2019, take that income and calculating your earned income credit, your child credit, and some others, and take the better of the two on your 2020 tax return.

And if you've already done your return and you didn't know about that because they didn't see this, you can fix that too by filing an amended return.

So a lot of benefits, but late breaking and not everybody knows about it.

Brett edwards: great information.

And as you mentioned, 2020 was obviously a terrible year.

The pandemic wreaked havoc, people lost their jobs.

So they had to turn to unemployment to kind of help provide for their families.

Is unemployment tax are income taxable?

And if so, what do i have to do if i did not report it on my 2020 return?

Mark steber: yeah.

Great question.

And the confusing area, even in a non pandemic year, unemployment benefits to start out with are yes, taxable.

And a lot of people don't think so because that's just not the sort of thing you would think that is, but if you left it off, you need to amend and put it on there, kind of sort of the irs generally knows about those things and we'll reach out to you.

But jump ahead to yesterday, the irs or the law was just passed yesterday to exempt $10,200 of unemployment benefits on your 2020 tax return.

So even though it is taxable with a law change just yesterday, as part of the rescue act, you can exclude up to $10,200.

And if you've already filed back to what we were talking about, you might need to amend to pull that off.

If you haven't filed yet, you need to see a pro to find out how it's to be reported because the irs is still digesting all that, but generally taxable, except for a late breaking tax law change.

Now, part of it not taxable, very confusing.

Brett edwards: sounds like it.

Hey, but in 2020 though, we did get a couple of us stimulus checks.

So are those first two stimulus checks taxable?

Also, what if i didn't get them all?

And a loaded question for you will the third stimulus check be taxable as well?

Mark steber: well, great question.

And a simple answer is stimulus payments are never taxable.

You should not put them on your tax return as taxable income like wages or interest or dividends.

Having said that we know for a fact, a lot of good americans try to do right.

They put that on their tax return and they paid tax on it.

Well, they may need to file an amended return and pull that off, but to be clear, first payment, not taxable, second payment, not taxable, third one, that's forthcoming, not taxable.

Having said that, though, if you didn't get all of your money you moved or your life changed, or the law changed for some taxpayers, you will get the first two payments reconciled on your 2020 tax return.

There's a form to make sure that you got all your money and asked all the questions and a pro can help you.

The third one, you'll do that next year on your 2021 tax return.

But if you didn't get all your money, there's a way to get it.

You may need to file an amended tax return if you haven't already requested it on your current year's return or next year's kind of confusing, but it's big money.

Make sure you get it right and get help if you need it.

Brett edwards: mark, there's so much information out there, especially with all the things happening behind the scenes.

Like you mentioned the american rescue plan act.

If people want more information, where can they go to find that?

Mark steber: well, our website at jacksonhewitt.com, we have frequently asked questions.

We have checklists.

We have videos of me explaining a lot of these provisions, so you can understand more what you need to do and if you did it right, and if you have more questions where to go and get help.

You can put your zip code in on our little tool, up pops all of your offices.

You can click and make an appointment.

You can walk right on in.

You can bring your tax returns in and we'll review them for you with a free lookback.

But jacksonhewitt.com, great place to get started.

If you have more questions or you need more information or you want to find an office.

Get started on your taxes, get your big refund and do it soon.

Brett edwards: mark, thanks so much for your time on this very important topic.

Like he said, go to jacksonhewitt.com if you want some more information on everything and anything taxes.

Mark, thank you so much.

Mark steber: