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- COVID has been really difficult,
especially difficult for self employed people.
And good news is though, there are some credits
that you can take on your 2020 tax return.
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You had said that there's two new credits,
maybe you can walk us through those.
- So under the Families First Coronavirus Response Act,
there are two credits as you said:
So one is the qualified sick leave credit,
and the other one is the qualified family leave credit.
And so those credits are specifically for self employed,
if they've been impacted by Coronavirus
or they're taking care of a family member
that has been impacted.
- So this is small business owners,
this is sole proprietors.
I mean, this is anyone basically
that is running their own business
no matter how big or small?
- Right. It's self employed, small business owners
even if you're, you work a side gig.
You would, you may qualify if you've been impacted.
- And that's interesting, right?
Cause I could have a full time job and a side gig
and I still might qualify.
Thankfully though,
you guys have this great calculator, right?
That can help people walk through this.
- Yes. It helps you easily figure out
what these credits are,
because the credits are based on
the amount of days of work you missed,
and your average daily self-employment income.
So it just helps you easily figure out the calculation.
For instance, if you have the qualified sick leave,
you're capped at a certain amount of days.
And then the same on the qualified family leave,
there's a different amount of days where there's a cap.
So it just helps you easily figure this out.
- Yeah, and look,
a lot of people had to take time away from their jobs,
to care for, for loved ones.
Whether they were elderly,
whether they were kids, who knows?
It was not easy in the beginning to figure all this out.
So at least they had these credits to think about,
and when they start to think about preparing
their tax returns for next year.
And Lisa, this stuff is really important,
cause this could affect my fourth quarter
estimated tax payment, right?
- Right, it's very important for self employed
to know about these credits,
and a lot of them don't know about these credits at all.
So if you're aware of these credits
that you're going to get when you file your 2020 taxes,
you can keep some money in your pocket now
when you go to make your fourth quarter estimates.
Because if you're aware of the amount of the credit,
then you can hold back on some
of your estimated tax payments.
- Now, the big question I'm sure
a lot of people have is this home office deduction?
It's always so sketchy, right?
Do I qualify?
Do I not qualify?
If I'm self employed,
and I'm a small business owner,
and I'm running a business out of my house,
do I qualify for the home office deduction?
- That is a big question we're seeing
with so many people working from home right now.
So the one thing you need to know
is, if you're self employed,
and you have a dedicated office for your business,
then you can deduct the home office expenses.
So it can't be your kitchen table,
where your kids and your family eat
and do their homework.
It has to be a dedicated office space.
And then the second thing,
we're seeing a lot of employees,
they're wondering, can I deduct my home office expenses?
And as of tax reform,
you can no longer deduct unreimbursed employee expenses.
So, generally only self employed can deduct home expenses.
- Right, because so many of us
are working from our home office,
but because we have an actual office somewhere else,
even though we haven't seen it in a really long time,
we cannot take the home office deduction
as a self employed person would.
- Exactly, yes.
- I mean, I get it though, right?
Cause we've, then you start to think,
well, can I deduct house expenses
and part of my electric bill?
And you go through all this stuff,
cause you have truly been using it,
probably, much more than were you going to an office
as a, you know, a full time employee.
But sadly, you're saying we can't deduct any of that stuff.
- Yes, on a federal level.
So on your federal taxes,
I should clarify, you cannot deduct that.
Some states are allowing you
to deduct unreimbursed employee expenses,
but it's a state by state bases.
- And so in that case then,
do you go through your house expenses,
and you take a portion that's allocated to the office?
- On your state tax return?
Yes, you would be able to possibly deduct
your home office deduction expenses
if your state allows that.
- So in that, so bottom line
is it matters if you have another office
somewhere else even though you're not going to it.
And you really should take advantage of the calculators
because between the home office
and all the two new credits,
these are difficult to kind of figure out on your own,
so people should definitely check out this site
and use the calculators.
- Right, yes.
And TurboTax easily walks you through.
If you're self employed, TurboTax self employed
easily walks you through your tax return
and then you can also connect live via one way video
to our TurboTax live CPAs
and Enrolled Agents.
And then new this year,
we have our TurboTax live full service,
so you can completely hand off your taxes
to a TurboTax live CPA, and enrolled agent
and get your taxes done.
- And still not have to leave your house?
- In the comfort of your home, exactly.
- That's fantastic.
It's one less thing to think about.
All right, Lisa Greene-Lewis with TurboTax,
thank you so much for all this.
I know tons of people are gonna have questions about,
can I deduct my home office?
I'm self employed is anybody out there helping me?
And we got some great answers today.
Thank you again.
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