Joe Biden is enjoying an early presidential honeymoon, with 60% of Americans approving of his job performance thus far and even more backing his handling of the coronavirus pandemic, according to a new poll from The Associated Press-NORC Center for Public Affairs Research.
More help is coming soon for the millions of Americans struggling to afford high-speed internet at home, which has become essential for school, work and many other areas of life during the pandemic.
Congress' December COVID-19 relief bill included $3.2 billion to help low-income Americans pay for broadband service, as the country continues its push toward recovery from the health and economic crisis. Last week, the Federal Communications Commission officially established the Emergency Broadband Benefit program, which will make use of those funds.
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The program will provide discounts of up to $50 a month, or $75 on Tribal lands, for broadband service for low-income households. It also includes a one-time discount of up to $100 for a laptop, desktop computer or tablet purchased from certain providers, which are yet to be named but are likely to include major wireless network operators, among others.
In an April Pew Research survey of American parents with children attending school remotely, 36% of low-income respondents said it was somewhat likely their children wouldn't be able to finish schoolwork because they lacked an internet connection at home. In the same survey, 43% of lower-income parents said it is very or somewhat likely their children will have to do schoolwork on their cellphones.
While experts say long-term solutions will still be needed to fully close the digital divide, the Emergency Broadband Benefit program could make major inroads in the coming months, a crucial time for economic recovery.
"This is a program that will help those at risk of digital disconnection," FCC Acting Chairwoman Jessica Rosenworcel said in a statement last month. "It will help those lingering outside the library with a laptop just to get a wireless signal for remote learning. It will help those who worry about choosing between paying a broadband bill and paying rent or buying groceries. This is good stuff."
Registration for consumers are expected to begin next month. Here's how to know if you're eligible.
Who's eligible?
Households with at least one member who qualifies for the FCC's existing communications support program, Lifeline, will be eligible for the emergency benefit. Lifeline serves low-income Americans, including those on Medicaid and Supplemental Nutrition Assistance Program (SNAP) benefits.
Households whose children receive benefits under the free and reduced-price school lunch program or school breakfast program during the current or prior school year will also be eligible, as will federal Pell Grant recipients.
Households that suffered a substantial loss of income since February 29, 2020, will be eligible if their total household income for last year fell below $99,000 for single filers and $198,000 for joint filers. The FCC will also provide the benefit to households that meet eligibility criteria for another low-income or Covid-19 discount program from a participating provider.
How will it work?
The FCC is still nailing down final details of the program, including participating providers and an exact start date. But it has shared some information on how it will work.
The commission says that many types of broadband operators can qualify to provide service in this program, regardless of whether they participate in the existing Lifeline program. That could open the door for more internet companies nationwide to participate in the emergency benefit program.
Participating providers will be reimbursed through the program for delivering broadband services or devices to low-income households. The FCC is in the process of establishing the systems needed for providers to participate.
Once enrollment begins, eligible households can register for the program directly with participating broadband providers or with the Universal Service Administrative Company, a non-profit designated by the FCC to administer funding for broadband connectivity.
An explainer: How the pandemic will affect filing your taxes
An explainer: How the pandemic will affect filing your taxes
Unemployment
Unemployment benefits are taxable income, which may surprise some filers.
Workers are not required to have federal taxes withheld from their benefit payments. While they are given the option to have it withheld, few opt to.
Additionally, unemployment benefits are always subject to federal taxes, but a handful of states do not tax it.
Relief checks
The two rounds of economic impact payments sent to millions of Americas are not taxable income. But people who did not get their payments, or received less than they were due, can get the proper amount by claiming the Recovery Rebate Credit on their 2020 taxes.
As a reminder, the first round of payment was worth up to $1,200 per eligible adult and $500 per dependent; the second was worth up to $600 for each eligible household member. Those who received a larger economic impact payment than they were due will not be penalized.
It's also worth noting that while no one has to pay tax on this income at a federal level, some states are taxing it.
Home office
Working from home became the norm for many in 2020, but few will be able to claim their expenses for their new home office setup. That's because the home-office deduction can only be taken by businesses or the self-employed. Employees can no longer claim any unreimbursed expenses following the last tax overhaul.
To properly claim a home office, it must be used "exclusively and regularly" as the principal place of business, said Lisa Greene-Lewis, a CPA and tax expert at TurboTax. That means the table where your kids do their homework, your family eats dinner and you do your work does not count.
Side note: It won't affect your federal taxes but if you relocated to a different state during the pandemic, you may owe state taxes in more than one location.
Tax credits
Congress put a temporary "lookback" provision in place for this tax season that could help many low and moderate-income households.
The provision allows taxpayers to use either their 2019 or 2020 income when claiming the Earned Income Tax Credit or Child Tax Credit. The eligibility and size of these credits vary based on household size and income. In general, the less earned, the larger the credit.
However, rampant unemployment put some families at risk of missing out or getting a smaller credit as unemployment is not considered "earned income" in the eyes of the IRS. In response, lawmakers are allowing taxpayers to pick which year's income would yield the greatest benefit.
Investing
A number of people jumped into the stock market for the first time in 2020. But tax experts warn these investing newbies may not be fully aware of their tax obligation.
The most important thing to understand is you only pay taxes on investments when you "realize" their gains. So if you bought a stock in 2020 and its value went up — you won't pay taxes on those gains until you sell. And if it sank in value, the same rules of "realizing" apply. It hurts to have a loss but you can use those to offset your gains, up to a limit.
It's also important to understand that gains are taxed differently depending on how long you held on to the investment. If you sell a stock you held for less than a year, they are taxed at the higher short term capital gains rate, versus the lower long term capital gains rate for investments held for more than a year. And if you are a higher income household, you may also face a net investment income tax on capital games and other investment income.
Made a killing at GameStop or another short squeeze? That won't come up until 2021 taxes, which aren't due until next year. But it would be wise start making plans or anticipated payments on those taxes now.
Some types of trading activity can be complicated, so it may be wise to seek professional help in preparing your taxes.
Fraud
Taxpayers may face a new challenge this year due to rampant unemployment fraud.
While millions of people sought legitimate unemployment benefit claims during 2020, scammers seized on the opportunity to commit identity fraud and make fake unemployment claims. California alone paid out $10.4 billion in fraudulent claims, according to a recent audit.
The IRS says taxpayers who receive Forms 1099-G for unemployment benefits they did not receive to contact their state for a corrected form showing they did not receive these benefits. Taxpayers who are unable to obtain a timely, corrected form from states should still file an accurate tax return, reporting only the income they actually received.
Gig work
If you jumped into gig work, like many did during 2020, be ready at tax time.
A big shock may be facing the the self-employment tax rate, which for 2020 is15.3% on the first $137,700 of net income to cover Social Security and Medicare tax. This is not the same as income tax.
One way to help offset this strain is to make sure to claim all your expenses, said Greene-Lewis. This includes supplies, advertising or marketing startup costs, or any equipment or dedicated home office.
If you were driving for a ride sharing service or delivery company, make sure tp claim all the mileage you are eligible for. Consider smaller items too, like supplies for the car or car washing, which are eligible expenses.
Charity
One bright spot for the year is a new, temporary deduction for charitable donations.
Taxpayers can deduct up to $300 for cash donations given to charity even if they don't itemize their deduction. The IRS estimates that about nine in 10 taxpayers now take the standard deduction instead of itemizing.
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