How to get Coronavirus tax relief in the US?
Covid 19 has caused a lot of damage to lives and the economy throughout the world. In this site time, even the governments of several countries are reaching out in several ways to provide support to their citizens to get back up on their feet.
In the USA the primary beneficiary scheme for all the citizens of the country was the CARES relief package that was released last year. Hundreds of thousands of people received support from the government directly as cheques into their bank accounts to get an opportunity to get out of the crisis. Other than this primary relief package there are many more smaller schemes that can help citizens get a lot of tax benefits from the government. Below are some of the schemes provided and how to access them using proper sources and methods.
No penalties for withdrawals from retirement funds
This bylaw is only applicable to people who have a dependent diagnosed with COVID-19 or have lost their jobs due to the pandemic or to secure the high health risk groups at home. The status quo is that the IRS charges a 10% penalty if citizens draw money from their retirement account before they are 59 and a half years old. This year due to the state of the economy citizens will not be charged with the penalty.
In fact, the decision also gives the citizens a choice to pay their taxes on the drawn amount in a span of three years or directly in the same year depending on the financial state of the person.
Tax deductions if money is loaned to family and friends
This is an old established rule that can officially provide citizens who owe money from their friends and family some tax benefits. The IRS allows tax deductions in the loan for up to seven years from the date the loan becomes worthless. Though this means that this should be an official debt to the known relation using proper government documents and should be declared a non-business bad debt.
There are a lot more technicalities involved with getting this tax benefit. Therefore people should seek out professional tax consultants in New Orleans, Texas, Georgia, and other states.
Freelancers can claim tax deductions
Self-employed workers get tax benefits if they work from their homes and do not have an office set up at a different location. This particular tax deduction can be calculated using multiple ways and therefore needs proper consideration to get the most returns.
Along with the primary CARES act that has helped millions of USA citizens, the several existing laws and by-laws can also help people claim tax deductions in different scenarios. To properly understand what exactly is applicable and all the details of these laws people should avail personal tax consultancy service like Tax and Accounting company.
