Get Your 2020 Taxes Right

4/9/21 - Taxes are scary but getting free money from the government is great. CYG's accountant and the force behind Taxes for Artists, Claudia Yi León returns to tell us all about how to deal with the wild year of unemployment and (non)income that was 2020. From PPP loans (freelancers, you can still get one) to extended filing deadlines (May 17) to claiming your stimulus payment if you didn't file 2019 taxes, this episode is packed with info. Cross-reference our notes below and follow @taxesforartists for all the latest.

Transcript below.

Listen on Apple Podcasts | Stitcher | Overcast | Pocket Casts | Spotify.

Top Line: Get used to uncertainty!

This pandemic + economic recovery and aid is a fast moving topic, changes can happen any and every day

There are 77,000 employees at the IRS and 143 million tax payers in the US - that phone is NOT gonna get answered right now

FIRST THINGS FIRST:

New IRS Deadline to file AND pay your 2020 taxes is May 17, giving you an extra month to procrastinate

check your state to see if they’re conforming to this date; not all are! The Turbotax Blog is actually a good place to check

Big Caveat: First quarter estimated taxes for 2021 are still due 4/15

Remember that to estimate the minimum quarterly payments for 2021, you have to base that on what you paid in 2020, which, Catch 22, you won’t know until May 17. Your options:

Use last year’s amounts of est tax

Guess

Blow it off, the penalty is 3/4% per quarter

If it’s a day late it’s a quarter late, so you may as well wait until June

We had several big relief bills that have helped many of us, but also have thrown all planning and rules into disarray:

First Covid Relief Bill was March 6 2020

Covid Relief Bill signed Dec 27 2020

American Rescue Plan March 11 2021

In the middle of tax season after people had already filed!

2020 Relief Greatest Hits:

Stimmies of $1200 + $600 + $1400 were based on the latest available filed returns.

The first two stimulus checks were based on either 2018 or 2019’s filed returns. If you didn’t qualify based on those income levels, but now qualify with 2020’s reduced income, or you received the wrong amount or none, you can reclaim those missed checks on this year’s return - Recovery Rebate Credit

Latest thresholds are $75K/$150K, phasing out at $80K/160K.

Previous were similar at $75K

$500/child, $600/child, $1400/child

IMPORTANT: Stimulus is NOT TAXABLE

$10,200 per person of UI is nontaxable for household incomes under $150K.  If you already filed, you early birdies, you caught quite a worm!  The IRS has stated that you do NOT need to file an amendment, and they will recalculate your refund and send it back to you. So don’t file an amendment, they’ve got enough on their plates

Enhanced Unemployment - was $450/wk if you received any state UI.  Now extended til Sept 4, giving you an an extra $300/wk

Other Stuff:

Healthcare: Did you get hit with an ACA Premium Tax Credit repayment?  Are you aware of what that is?

Many taxpayers register on the Healthcare Marketplace and understate their expected income, either through mistake or trying to be too clever by a half.  This results in a higher health care subsidy, which means a lower monthly premium

What you may not realize is that at the end of the year, when you report your ACTUAL income, you end up paying an extra tax, the Premium Tax Credit, which is the amount of subsidy you have to give back

Claudia’s advice to taxpayers: if you are on that border of affordability, don’t understate your income if you don’t want to be hit with a big tax at the end of the year.

You need to know that if your income turns out to be lower at year’s end, you will get that premium tax credit back for the ACA subsidy you didn’t take earlier in the year.

But as a pandemic special: You won’t have to pay back the PTC in 2020!

Also, random but awesome, the first relief bill permanently made tampons and other menstruation products, OTC drugs medical expenses for FSA and HSA plans and therefore tax-free.

PPP LOANS

If you didn’t apply for or receive PPP, you may still be eligible as a small business, freelancer, gig worker aka anyone who receives a 1099 and/or fills out the Schedule C part of your tax return.

PPP (presumed to be forgiven) and the EIDL advance are tax free if used correctly.

If you got a loan under $150K, the forgiveness application is very easy, you just certify “I used this money correctly.”

But please use it correctly and save the receipts for 5 years in case of SBA audit (not IRS audit as this money comes from the Small Business Administration).

How much will I get? Loans are equal to 2.5 months of wages or wage equivalents (profits in the case of sole proprietors).

New rules as of this month allow small biz sole proprietors/gig workers to use Gross Income (before you use your expenses) to make this calculation

Less than $150K Gross

You have 24 weeks from receipt to use the funds

You have 24 weeks plus 10 months after receiving the PPP loan to apply for forgiveness.

Second PPP:

If your revenue dropped 25% or more in any quarter of 2020 compared to the same quarter in 2019, you can qualify for a second PPP loan, and you have less than 300 employees

TAX IMPLICATIONS:

Note that PPP is tax-free and its expenses are deductible on your federal return, but not all states are following suit!

The Tax Foundation has an up-to-date list of states and their federal conformity with respect to PPP tax treatment.

Can I still get one?

Biden just signed a bill March 30th that extends the deadline for PPP until May 31!  So you can apply for both a first and/or a second PPP loan.

This is great for procrastinators, because if you are a sole proprietor and already got a PPP loan based on your profit, not gross, TOUGH TITTIES, no mulligans! No do-overs

But wait there’s more for 2021:

$300 above-the-line charitable contributions for 2020 and 2021.  Political campaign donations are NOT tax deductible, so find another cause!

Business Meals are 100% deductible 2021-2022

Child tax credit for 2021 is $3000 or $3600 for kiddies under 6, up from $2000. The credit is supposed to be an up front “periodic” payment, with the first payments starting on July 1, 2021.

Earned income tax credit increases quite a bit, which is a refundable tax credit aimed at lifting the working poor out of poverty

Premium tax credit is more generous for health insurance subsidies, extended to people on UI and those making 400% above the poverty line. No PTC penalty for 2020!

Paid sick leave and PFL credits for employers have been extended to September, as well as the employee retention credit

CREDITS

Executive Producer: Gina Delvac

Hosts: Aminatou Sow & Ann Friedman

Theme song: Call Your Girlfriend by Robyn

Composer: Carolyn Pennypacker Riggs.

Producer: Jordan Bailey

Visual Creative Director: Kenesha Sneed

Merch Director: Caroline Knowles

Editorial Assistant: Laura Bertocci

Design Assistant: Brijae Morris

Ad sales: Midroll

LINKS

Taxes For Artists

TurboTax blog

Tax Foundation

Taxes are scary but getting free money from the government is great. CYG's accountant and the force behind Taxes for Artists, Claudia Yi León returns to tell us all about how to deal with the wild year of unemployment and (non)income that was 2020.

What better time to be lifting up the people we love and growing together? Brooke Baldwin of CNN joins us to discuss the groups of women - or huddles - that make collective change happen at work, in activism, sports, and our personal lives. And we revisit our own notion of Shine Theory.

You should never pee when you laugh. You can see a midwife for non-pregnancy health exams like pap smears. And you can even insert your own speculum at the gynecologist if that makes you more comfortable. We revisit all the things we learned about pelvic health from our Pelvic Power episode.

Samantha Power served as the US ambassador to the United Nations in the Obama administration and has been nominated by President Biden to serve as administrator to USAID. We revisit our 2019 interview full of hard and candid truths about what she was and wasn't able to accomplish, especially in Syria.

It doesn't feel like a great time for pleasure, but that's exactly why we need it, right now. We revisit our interview with adrienne maree brown, author of Pleasure Activism, Emergent Strategy, and most recently, We Will Not Cancel Us.

Getting real about recognizing burnout, how it's different from similar feelings like depression, and how ambition means more than working constantly.

A planned tar sands pipeline through Northern Minnesota crosses tribal land and would disrupt waterways and wild rice cultivation. Tara Houska is Ojibwe, an attorney, an environmental and indigenous rights advocate, and has a long history on the land Line 3 would travel through.

Poet, artist and activist Cleo Wade feels deeply and writes movingly about growing up, finding ourselves, and having good boundaries with the people in our lives and our social feeds.

Caity Weaver joins us to discuss her love of Santa Fe, television, pronouncing words correctly, and how her insatiable curiosity compels her to find out how glitter is made. Plus, in her many celebrity profiles: who tried to pick up the check, who was beautiful in person, and who smells amazing.

This episode is all about comfort in challenging times and staying true to yourself. We talk with a paragon of creating cozy feelings, Jenny Han, the author behind the book and Netflix series To All the Boys I've Loved Before.

Is it childish to call people Best Friends? Who holds the various keys to our hearts and identities? And what dreams of the past and future are getting us through the pandemic? Aminatou discusses travel, religion, finding ourselves and how we use coded language to find our people with Jedidiah Jenkins.

We discuss the inauguration celebrity parade, the fallacy of calls for "unity," Melania's caftan, Bernie's mittens, and "We will be back in some form."

We’re reading fiction, nonfiction, essays and anxiety-producing novels.

The new year has already been more of a lot. Amid so many challenges, here are the practices, advice, and rituals we're bringing with us into 2021.

Crawling to the finish line of 2020, we catch up and reflect on what parts of our pandemic routines we may keep as we move into 2021.

As cases spike in the U.S., we talk to one of our favorite consent experts, sex and dating coach Myisha Battle, about how to have the COVID talk with friends, family, and potential romantic prospects.

How do you get more deeply involved in a cause you care about? Especially when it's an issue as challenging as homelessness? We talk with Melissa Acedera who practices mutual aid through Polo's Pantry, a mobile food bank in Los Angeles.

We are enjoying this slow season, grateful for what we have and opening our wallets for those who experience food insecurity. In the first of two episodes about food justice, we discuss our Thanksgiving feels and talk with Ebony Derr, financial manager at the Okra Project, which nourishes Black trans people with meals and community. Plus, our favorite Thanksgiving movies, what we're eating, and flashpoint feelings around okra (the food itself).

Purging our archives, mailing care packages in lieu of clothing swaps, confronting our own consumerism, who we imagine perusing our estate sales, secret talents, and some delightful things we're watching (including cults and sexy chess of course).

Joe Biden and Kamala Harris won. We break away from our stress puzzling to celebrate this win. While there's so much work to be done, seeing Kamala on stage Saturday night was very moving. We revisit our 2018 interview with then Senator, now VP-elect Harris. And we are pleased to announce this officially breaks the CYG curse of only highlighting candidates who do not ultimately win!

As we await final results, we share our election week feels and discuss some of the racist scams that undergird the American electoral system - like the Electoral College itself - with Heather McGhee, author of the forthcoming book, The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together. Plus, the local gains, newly minted officials and old timers (like Nebraska's Ernie Chambers) who are giving us hope.

The Guerrilla Girls have been resisting sexism and racism through art for the last 30 years. An anonymous collective of gorilla-mask bedecked agitators, their campaigns have ranged from protests to posters, billboards, and museum interventions. With style, humor, and collective action, they call attention to issues rich and powerful institutions would rather side-step. All the members take pseudonyms after dead women artists. We talked with founding members Frida Kahlo and Käthe Kollwitz about the body of work collected in a new book: Guerrilla Girls: The Art of Behaving Badly.

Activists and artists were waking up each day in anger and despair after Trump's election. Alongside actions and demonstrations, groups started forming around the country to gather, protest, and sing. In the first episode about the art of resistance, we listen to the voices (spoken and sung) of two choirs: the Resistance Revival Chorus in New York City and Community Chorus in Los Angeles.

We contemplate a VC-backed startup for women who need to scream into pillows. A brief discussion of the Supreme Court nomination of the Judge Handmaiden. Fortunately, Rebecca Traister's work on the political power of women's anger is always timely, as we revisit our 2018 interview.

In this latest season of the pandemic, we're trying to find joy where we can: guava cocktails, vintage golf clothes, journaling, repetition, boredom, and the future.

We're managing our election anxiety and getting out the vote. Does phone banking, text banking, and making a voting plan really move the needle? We find out with Crooked Media political director Shaniqua McClendon.

Do you need something to read (and take your mind away from doom-scrolling)? We talk with Nessa Rapport about her novel Evening and Alice Wong, editor of the anthology, Disability Visibility.

How can we create change from within institutions? We talk with longtime civil rights activist, Pramila Jayapal, who was elected to Congress in 2016 about her work with the Congressional Progressive Caucus, pushing for change within the Democratic Party.

We're engulfed in crises: caregiving, police violence, employment, and an election. These may feel like unprecedented times, and yet, some of our favorite guests have been experts and activists who tackle these issues.

What does attraction mean, specifically for people who don't experience sexual attraction? Angela Chen joins us to talk about her book Ace: What Asexuality Reveals about Desire, Society and the Meaning of Sex.

@2021 CALL YOUR GIRLFRIEND LLC