SAN DIEGO — It's the beginning of tax season and we got insight from a local tax expert on how the pandemic can impact your return.
Brian Livesay says 401(k) penalties and working from home expenses are hot topics this tax season.
"One thing that people should know is if you take money out of your retirement, you don't have to pay the 10% tax penalty," said Livesay.
According to Livesay, many people were taking money out of their retirement due to being laid off or changing jobs.
"Unfortunately, with the tax cuts jobs act, if you're an employee... all write off's went away, but, if you are working from home as an independent contractor or a self-employed person, then you are able to write off your home office expenses, like internet bill and rent," said Livesay.
He tells News 8 that tax firms have become better suited to prepare taxes. When the pandemic started in March 2020, tax preparers were adapting to changes to assist clients with preparing documents.
"You can write off a certain amount on your tax return and you don't have to provide documents." Livesay said, referring to the standard deduction of up to $300 in charity donations.
From paper to digital, Livesay says you'll find tax preparers recommending that people scan documents and receipts to send through email to avoid in-office visits.
A little more work for the not so tech savvy clients.
And, when it comes to spending money on filing taxes, Livesay says online tax program prices are going up, when on average it will cost you nearly $300 to file with a tax expert and everything is done for you.
He adds, you want to save money maximize your return, but it's about filing accurately and knowing what you can write off.