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How Covid-19 relief money could impact your taxes and what to do about it

Tax-filing season is here, and you may be wondering how the pandemic will affect your return. Many filers have a lot more questions about their taxes this year than in the past.

“For this specific tax season, it’s all about organization, especially because of what was provided last year for Covid relief,” said Sheneya Wilson, a CPA and founder of Fola Financial. 

We talked to several tax experts to get answers to common questions and tips on what you should do before filing your 2020 federal income tax return.

Here’s the No. 1 question: 

Are stimulus checks taxed? 

Are unemployment benefits taxable?

Unemployment benefits are always taxed on your federal return, said Kelley C. Long, a CPA and one of the AICPA’s Consumer Financial Education Advocates. “Even the extra $600 weekly payment is taxed.”  

 “If you didn’t have taxes withheld, you will have to pay taxes on it,” she said. “But there are some states that don’t tax unemployment compensation and a few only tax part of it.” 

Does PPP relief need to be reported? 

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