Taxing time: How the pandemic will affect filing your taxes

The pandemic has made everything a bit trickier — tax filing season is no exception.

The whole process is starting a bit later this year and there are a few wrinkles to be aware of for those who received unemployment benefits, worked from home, took on gig work, were a victim of fraud — or faced other issues common to 2020.

The IRS will begin accepting tax returns on Friday. Here’s what you should know before you file:

Unemployment: Unemployment benefits are taxable income, subject to both federal and New York State income tax. Workers are given the option to have taxes withheld from their benefits, but few opt to.

Relief checks: The two rounds of economic impact payments sent to millions of Americans are not taxable income.

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 payments 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.

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.

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 the opportunity to commit identity fraud and make fake unemployment claims.

Taxpayers who receive Forms 1099-G for unemployment benefits they did not receive should 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, a big shock may be facing 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, claim all the mileage you are eligible for.

Charity: 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.