Kale Goodman is a serial entrepreneur and has over 18 years of service in the accounting field.
Many of us are delighted that 2020 is over, and we can put the worst of the pandemic behind us.
The costs for businesses and public places to stay sanitized and safe cost a lot. Places like schools, restaurants, and stores took the brunt of it. However, unlike previous years, Congress is allowing personal protection equipment expenses from Covid-19 to be deductible.
Any purchases made with the idea of protecting oneself against covid-19 is deductible as a medical expense. Any out-of-pocket costs for items like gloves, masks, or hand sanitizer can also be deducted from your 2020 federal income tax return. If covid tests were an expense last year, you could deduct those as well.
Though it's a nice break, especially with how hard the pandemic hit some, it isn't as easy as just saying you purchased PPE, and that's that. There are two qualifications you need to meet to get those deductions. First, your itemized deductions must be higher than the standard deduction. If they don't, then your itemized deductions cant lower your taxes or increase your refund.
The second part is that you can only obtain unreimbursed medical expenses if they are above 7.5 % of your adjusted gross income.
Teachers are also getting a break from any money they spent on PPE. As long as the educator purchased any PPE after March 12, 2020, it can go under an Educator Expense Deduction. Teachers receive up to $250 on "qualified, reasonable expense" a year. This is a nice deduction because you can get it without needing to itemize your taxes.
The tax filing deadline is May 17, so make sure you're getting all the credits and deductions you possibly can if you haven't filed already. Not sure if you qualify? Speak to a CPA or accountant to see if you can save money on taxes this year.
© 2021 Kale Goodman