January 26, 2021
While 2020 was a year marked by struggle, Borough of Manhattan Community College (BMCC/CUNY) Accounting Professor and New York State licensed Certified Public Accountant (CPA) Joel M. Barker has some welcome information for 2020 income tax filers — much of it related to changes set in motion through the CARES Act.
The stimulus check is not taxable
For one thing, Professor Barker says, “The Economic Impact Payment, or EIP, commonly referred to as the ‘stimulus check,’ is not taxable.”
Another piece of good news is that taxpayers who did not receive an EIP — or who received a reduced amount — can claim the new refundable recovery rebate credit on their 2020 tax return.
In fact, says Professor Barker, “individuals with qualified dependents in 2020 — dependents that did not exist on their 2019 or 2018 tax returns — can also claim the credit.”
He gives an example: “If a taxpayer gave birth to a child during 2020, that taxpayer is eligible to claim the recovery rebate credit.” For more information, Professor Barker recommends the Recovery Rebate Credit page on the IRS website.
Non-itemizers can deduct charitable contributions
Taxpayers can now deduct $300 in charitable contributions — even if they don’t itemize, Professor Barker says. “This is a great benefit to low-income individuals that have contributed to their favorite charities during 2020.”
And for those individuals who do itemize, deducting qualified contributions of up to 100 percent of their adjusted gross income is allowed — as long as it’s a cash contribution, made to a qualified charitable organization, and made during 2020.
For more information on charitable contributions, Professor Barker recommends visiting the Charitable Contributions Deductions page on the IRS website.
Can working-from-home expenses be deducted?
“In a year of social distancing and stay-at-home restrictions, a lot of people are wondering if they can deduct expenses incurred by working at home,” Professor Barker says. “The simple answer is ‘No.’”
The Tax Cuts and Jobs Act, he explains, enacted in 2017, suspended those deductions for the tax years 2018 through 2025. “But if you are self-employed and conducting business from home on a regular basis, the deductions are generally available.”
Also, Barker says, employees can negotiate reimbursement arrangements with their employers. To review guidelines and learn more, he recommends visiting the Here’s what taxpayers need to know about the home office deduction page on the IRS website.
Teaching tomorrow’s accountants ‘is in his DNA’
Barker’s interest in income tax predates his tenure as a professor of accounting. Before joining BMCC, the professor served as a CPA specializing in public accounting with a focus on audits and taxes.
A winner of the 2020 Distinguished Teaching Award at BMCC and now immersed in teaching and research related to taxation, Professor Barker’s peer-reviewed articles have appeared in prestigious venues including the CPA Journal, Journal of Accountancy, Journal of Economics and Public Finance and others.
“Teaching seems to be an intrinsic part of my DNA,” says Professor Barker, who also serves as coordinator of BMCC’s Volunteer Income Tax Assistance (VITA) program.
The VITA program prepares college students to pass the IRS Basic and Advanced Volunteer Tax-Preparers Exam and become IRS-certified volunteers, providing free tax preparation through the New York City Food Bank and Urban Upbound.
VITA shifts services online — as have most tax preparation providers
Restrictions due to the pandemic did not prevent BMCC students from volunteering to become certified tax-preparers in 2020.
“The BMCC-VITA training this year was completely online via zoom,” Professor Barker says. “Over 65 students attended the training along with six BMCC accounting faculty members — Professors Sidney Askew, Sharon Brickman, Barry Cooper, Corinne Crawford, Wilbert Donnay and Achraf Seyam.”
Content covered in this year’s VITA training “was more intense because of all the new tax laws enacted through the CARES Act,” Professor Barker says. “Students were expected to be familiar with these changes to better serve their communities.”
In addition to changes that relate to charitable contributions and the recovery rebate credit — to name a few — this year e-filers can start as early as February 12.
“To protect our volunteers and clients, most VITA sites will be conducting contactless tax preparation services,” Professor Barker says. “Taxpayers can either drop off their documents, email or fax them. They can also find assistance through VITA in getting their documents together and completing the process with a certified volunteer, by phone or in a video conference.”
Most other CPAs, and tax preparers will also be offering virtual services to protect their employees and clients.
“Given changes in the tax law in 2020, it would be prudent for taxpayers to consult their CPAs or tax-preparers to better assist them,” Professor Barker says — and he offers a ray of hope. “This was a tough year for so many people — but once you sit down to file your taxes, you might find the news is not all bad.”
Members of the BMCC community who earned $57,000 or less in 2020 can access free assistance filing their 2020 annual income tax by contacting the BMCC Advocacy and Resource Center (ARC), formerly known as Single Stop) or consulting the IRS website to locate a VITA site in their community.
- Changes to the tax code and income tax filings have been set in motion by the 2020 CARES Act
- These changes include the stimulus check being non-taxable, and non-itemizers being able to deduct for charitable contributions
- BMCC students in the Volunteer Income Tax Assistance (VITA) program learn these changes and much more, as they are certified by the IRS to provide free tax preparation for those earning $57,000 or less