Don’t make tax season harder for yourself by ditching old tax documents before you should. But how long do you really need to hold onto them? It depends.
An explainer: How the pandemic will affect filing your taxes
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.
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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.
