2020 was a long year; there were protests, a highly contested election, and Covid-19, but you still have to file your taxes. Both federal and state tax filing deadlines have been extended to May 17, however the earlier you file, the better.
There are multiple options for when you are filing your taxes, some of which depend on your income level. If you earned below $72,000, there are multiple sites that partner with the federal and state governments to file your taxes for you.
Some examples are TurboTax, and H&R Block. However, these companies make it hard to find their free filing sites through search engines, and you have to navigate through the IRS website (linked below) to find the free tools.
Some of the free tools have limits inside the $72,000 limit that make them more restrictive, and some do not file state taxes. The state tax board site outlines a few other sites that don’t have limits on income, like Credit Karma. With the free-filing tools, a lot of the work is done for you, and it guides you along pretty easily. For most people filing, one of the free option below should work.
With the free filing options, as long as you have your W-2, from your employer, or a 1099 form, either the 1099-G for unemployment benefits, or 1099-MISC from any contracting jobs, the free-filing options should take 30 to 40 minutes, for both state and federal filing. If you want to do it yourself through the actual state and federal website, rather than the partnered free-file options, it will probably take 40 to 50 minutes.
If you were supposed to get a stimulus check, and did not receive it, you can also claim a Recovery Rebate Credit on your tax return. If you did not receive either of the stimulus checks, it would have been because of your 2018 or 2019 tax returns. Claiming the credit on your 2020 return will update your filing status for any future stimulus checks.
In a usual year, most people would receive a W-2 from their employer, and potentially a 1099-MISC form for any part-time or contracting work that was done. 2020 was a bit different though. With massive unemployment claims through the California Economic Development Department, a 1099-G form will be mailed out for those that earned unemployment.
Unemployment income is taxable at the federal level. You can opt in to have your taxes taken out at the time of payment. Otherwise, you would still need to pay taxes later. California does not tax any unemployment benefits at the state level though. The first $10,200 will not be taxed (Check this later).
How you file your taxes depends on a few factors. If you earned any income from second state, or lived in another state for 182 days, or just over six months, you will have to file a second state tax return with the income from that state.
IRS Free filing tools (For under 72,000 in Income): https://apps.irs.gov/app/freeFile/
IRS Fillable forms (For over 72,000 in income): https://www.irs.gov/e-file-providers/free-file-fillable-forms
How to get your 1099-G (unemployment benefits paperwork in California):
https://edd.ca.gov/Unemployment/Get_Tax_Information_(Form_1099G).htm
California State filing: https://www.ftb.ca.gov/file/ways-to-file/online/index.html
Editor’s note: This story above references an opinion and is for information purposes only. It is not intended to be financial advice. Seek a duly licensed professional for financial advice.
