The tragedy and suffering of the pandemic shouldn’t be understated. There will be a lot of long term pains we may not even be recognizing yet. Personal ones and economic side effects. Yet, every problem has its silver lining too. Here are just four of the tax breaks you may now be eligible for, thanks to the coronavirus. It may not be a trade off you wanted to make, but take the financial break while you can get it.
- State & Federal Income Taxes
If your income has been impacted by health issues or quarantine restrictions you’ll also probably pay less in taxes.
Federal income tax deadlines have been moved to the summer of 2020 to give you more time to plan to maximize deductions and tax refunds.
In the meantime, you may be eligible for government help. Even real estate agents may now qualify for financial aid due to the slowdown in the NY property market.
- Home Office Deductions
Home office tax deductions have long been a favorite with those who work from home. Now that most are, it’s worth seeing how much less you can pay in taxes every year for setting up your own home office.
- Business & Investment Losses
If you are a business owner or even just have an investment portfolio and vacation rentals, there’s a very good chance you’ve encountered losses. Some may be attributed to the 2019 tax year, and probably far more for 2020.
While few may prefer losses over gains, with the right structure and help of a good CPA, these losses can be used to offset gains in previous and future years. All dramatically lowering how much you’ll have to fork out in taxes during this period. Make the most of it.
- Lower Property Taxes
Nassau County executive Laura Curran is among those already bemoaning the loss of property tax receipts and real estate taxes. She says she expects this to create an overnight budget shortfall of over $260M.
While over in Suffolk County, Babylon Village is threatening to raise taxes to cover pay raises for employees and public improvements, Nassau is talking about cutting back on recruiting and expenditures. This financial gap may also be closed by the fact that less services are needed due to reduced travel, and school district taxes could be eliminated due to their closing. Liquidation of school property could also inject billions in cash to the local economy. Don’t expect this to stop them from trying to raise property taxes further, after a poorly misled foray into reassessing property values several months ago.
However, with business and residential property sales stalling out, and prices ready to plummet, most Long Islanders should be able to challenge their annual property tax bills and achieve a substantial reduction. The ability to save thousands of dollars on this one bill this year could help cover any financial gaps in medical bills and lost income this year.