Taking care of the contagion of coronavirus is not only beneficial for your health and that of your loved ones but can also bring reductions in your taxes. What must you do to score the deduction?
By claiming all of the deductions and credits you’re eligible for, you can reduce your tax bill and increase your tax refund. How can you score a tax deduction by preventing the spread of coronavirus?
We are in the middle of tax season, and even though paying taxes is inevitable, there are some totally legal ways to keep more of your hard-earned dollars in your pocket. What items you use to prevent the spread of Coronavirus are now tax-deductible?
The deadline to file your taxes was extended till May 17, so you can include the new deduction the IRS has just announced in your return, to increase your tax refund.
What are tax deductions and credits?
• Tax deductions: Tax deductions lower your taxable income. For example, if you make $35,000 per year and have $5,000 in tax deductions, you will only pay taxes on $30,000 of your income.
• Tax credits: By contrast, a tax credit is a dollar-to-dollar reduction of what you owe in income taxes. For instance, if your tax bill is $600 but you have $600 in tax credits, you’d have a tax bill of $0.
To help you get every dollar you’re entitled to receive in your tax refund, learn about the new items you can deduct when you file your taxes this year.
The Internal Revenue Service issued an announcement clarifying that the purchase of personal protective equipment, such as masks, hand sanitizer, and sanitizing wipes, for the primary purpose of preventing the spread of coronavirus are deductible medical expenses.
The amounts paid for personal protective equipment are also eligible to be paid or reimbursed under health flexible spending arrangements (health FSAs), Archer medical savings accounts (Archer MSAs), health reimbursement arrangements (HRAs), or health savings accounts (HSAs).
If you want to find out how to determine what is deductible, see Can I Deduct My Medical and Dental Expenses?