2020 Income

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In the fall of 2019 I had to estimate my income for 2020 to qualify for health insurance assistance. The estimate I came up with was $19440. That’s about 70% less than my income from the previous year. Unemployment was $8000, dividends and interest gave me another $8000. Ebay sales and a family trust will add about $1600. That falls about $1800 short of my estimate. The only nice thing about being in a low income bracket is that I will get a tax refund this year. That will help pay the bills for a month. The income limit for the federal earned income credit in 2020 (single/no children) is $15,820. There is also a limit of $3650 on investment income, so that disqualifies me for that credit. I guess that’s why they call it an “earned” income credit.

My property taxes are about $3400 per year. In past years, I’ve been able to help pay the tax by applying for a Minnesota State Property Tax Refund. Last year the refund was over $1000. This year, with less income, the refund should be around $1600. Total tax refunds should amount to $2400. Plus, if they send $1400 economic stimulus checks in 2021, the total will be $3800. Next year’s taxes will be interesting as there will only be dividend and interest income to report. I don’t expect to make any money from Ebay in 2021. Increased shipping and transaction fees have killed off my resale business so far in 2021. It will be a challenge generating the same amount of income in the stock market, where taxes will have to come out of any gains. Income tax rates in Minnesota are among the highest in the country, so I will most likely have to pay State income tax next year.

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