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TRACY BYRNES: So this global pandemic
has affected so many areas of our lives.
But in particular, it will affect your tax return.
So there's a bunch of things that you just
need to think about as you're starting
to put your files together, as you're starting to speak
to your accountant, as you're potentially prepping
to use an online tax service.
Lisa Greene-Lewis, CPA and Turbotax expert,
is here with us right now.
Lisa, there were some huge trends.
Biggest was that people are still working from home.
What do they need to know?
LISA GREENE-LEWIS: Yes, we are still
hearing this question about, are my home expenses deductible?
And one thing that people need to remember is unless
you're self-employed, you cannot deduct your home expenses,
unfortunately.
Under tax reform, everything changed,
and unreimbursed employee expenses
are no longer deductible.
And then, if you are self-employed,
you need to remember that your office,
it has to be a dedicated space in your home.
So it can't be that you work at your kitchen table
where everybody eats and your kids do homework.
You have to have a dedicated space.
TRACY BYRNES: Right.
But those of us that are employed by other companies,
who have offices somewhere else--
even though they're very dusty because we haven't been there--
you cannot take a home office deduction.
This great resignation is a thing.
It's a movement.
People are resigning from their jobs, really top level.
What do they need to be thinking about when
they start to sit down and prep their tax return?
LISA GREENE-LEWIS: Yeah, so people that
have left their jobs and they've either become self-employed
full-time or they work a side gig,
they need to remember that their income is going to be
taxed a little differently.
And they're going to see different tax forms
than when they had an employer.
When you're self-employed, first of all,
you don't have taxes taken out on a regular basis
as a withholding.
So if you think you're going to owe $1,000 or more,
you need to pay estimated taxes.
But then, on the flip side, there's a lot of deductions
that you can take when you're self-employed,
as long as they're directly related to your business,
so expenses like computer equipment,
or if you designed a website for your business,
or office furniture and things for your office.
Remember that those things can be deductible
and really help your tax situation.
TRACY BYRNES: For sure.
Health care as well, people need to be aware of that.
The stock market, despite the pandemic,
has kind of been on fire.
So people have potentially a lot of gains.
Crypto has been moving.
You need dramamine to follow it.
But it has been moving.
So there might be capital gains there, too.
So what do people need to be thinking about?
LISA GREENE-LEWIS: Yes.
So I know there's a lot of new investors out there.
The first thing they need to think about,
I often hear the question-- people don't even
know when their transactions are taxable.
So they need to think about you don't
have a taxable event until you sell your stock or crypto.
Also, depending on how long you hold your stocks
before you sell them, that's also how you're taxed.
If you hold your stock or crypto for over a year,
then you have the benefit of those long-term capital gains,
which are--
you're taxed less.
And then, also, remember, if you had
any losing stock, or any crypto losses when you sold,
which a lot of people are not having those, but if you did,
you can offset your gains with those losses.
And then, your losses can carry over
to your ordinary income like your W-2 income
or self-employment income.
And that's up to $3,000.
TRACY BYRNES: So I'm getting my investments together,
and crypto, in particular, starts
to get so confusing because people
are trading in and out of it.
How do I even keep track of this with my tax return?
LISA GREENE-LEWIS: Yeah, so we have Turbotax Premier.
And it really gets after one of the biggest pain
points that investors have.
We are able to directly import your stock transactions
and your crypto transactions from
these financial institutions and crypto platforms.
So we can directly import up to 4,000
cryptocurrency transactions and 10,000 stock transactions
at once.
TRACY BYRNES: Lisa Greene-Lewis, CPA and Turbotax expert,
thank you so much for clearing this up.
LISA GREENE-LEWIS: Thank you for having me.
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