With the start of filing season on Feb.12, the Internal Revenue Service urged taxpayers to take some simple steps to ensure they are filing accurate tax returns and expedite their tax refunds to avoid a variety of pandemic-related issues.
Although each year the IRS encourages taxpayers to file their tax returns via email and use a direct deposit to get refunds, the IRS emphasizes taxpayers who have not previously used the e-file to use it this year to avoid paper processing delays. Taxpayers can file electronically by using a tax advisor, IRS Free File, or other commercial tax preparation software. The IRS cautioned against filing tax returns on paper, and paper checks will be even longer this year for a variety of reasons.
Taxpayers have until Thursday April 15, 2021 to file their 2020 tax return and pay the taxes owed. The IRS expects more than 160 million individual tax returns this year, with nine out of ten returns filed electronically. At least eight out of ten taxpayers get their refunds through direct deposit.
“The pandemic has created a variety of changes in tax law and some unique circumstances for this filing season,” said IRS Commissioner Chuck Rettig. “To avoid problems, the IRS urges taxpayers to take a few simple steps to ensure they get their refund as soon as possible. Start with electronic filing and direct deposit.
“After months of hard work, we are ready to start this year’s tax season,” added Rettig. “Getting to this point is always a year-round effort for the IRS and the country’s tax community. Doing so in an ongoing COVID-19 environment while making recovery payments for the nation is an unprecedented achievement by IRS staff. I would also like to thank all of our tax partners and tax professionals for their hard work making tax time smoother for the nation. We are all ready to serve American taxpayers in this important filing season. “
Ken Corbin, Commissioner for Wages and Investments and Chief Taxpayer Experience Officer, provides a detailed look at how the IRS is preparing for a successful filing season in his A Closer Look column.
Be Tax Ready: Review changes related to pandemics
Last year’s major tax changes not only affected individuals and their families, but may also affect the tax returns they file this year. A new IRS fact sheet explains what taxpayers need to know in order to file a complete and accurate tax return. The IRS recognizes that filing this year can be challenging for some taxpayers, and it is important to understand how to claim credits and deductions, receive a refund on time, and meet all tax obligations.
Recovery Rebate Credit helps individuals who are still eligible for economic impact payments
For those who may be eligible for Stimulus Payments, they should carefully read the Recovery Rebate Credit Policy. Most people have received payments for economic impact automatically, and anyone who has received the maximum is not required to provide any information about their payments when filing. However, if you haven’t received any or only partial payment, you may be able to apply for the refund credit when filing your 2020 tax return. Tax filing software, including IRS Free File, helps taxpayers determine the amount.
New language settings to help taxpayers
In addition, Forms 1040 and 1040-SR are available in Spanish for the first time this year, and the IRS has a new form that taxpayers can use to request information from the IRS in their preferred language. With the Schedule LEP (request for a change of language preference) taxpayers can request information in around 20 different languages in addition to English.
The IRS would also like to remind taxpayers of other important changes that could affect their tax returns this year.
Remember to consider the distribution of retirement savings
Some taxpayers have found it necessary to make early coronavirus-related distributions from 401 (k) plans and traditional IRAs in 2020. Under CARES, these distributions – up to $ 100,000 – are not subject to the additional 10% tax that is otherwise generally applicable to distributions made before a person reaches the age of 59½. In addition, a coronavirus-related distribution may be factored into income in equal installments over a three-year period and an individual has three years to repay a coronavirus-related distribution to a plan or IRA and the tax implications to reverse the distribution.
Taxpayers should also remember that they have until April 15, 2021, to contribute to traditional IRAs and deduct that amount on their 2020 tax return if necessary.
New for 2020: Non-Itemizers can deduct $ 300 for cash donations
Until now, charitable contributions could only be deducted if taxpayers listed their deductions.
The CARES Act allows taxpayers who do not report any deductions to make a charitable deduction of up to $ 300 for cash contributions in 2020 to qualifying organizations. For the purposes of this deduction, Qualified Organizations are those that serve religious, nonprofit, educational, scientific, or literary purposes.
Today more than ever, e-file is the best
Now more than ever, the safest and best way to file a full and accurate tax return and get a refund is through electronic filing and direct deposit. Taxpayers can visit IRS.gov/filing for more information on IRS Free File, Free File Fillable Forms, and Free Tax Preparation Sites. Electronic filing is also possible through a trustworthy tax advisor. Free File is a great option for people who only file a tax return to apply for Recovery Rebate Credit, either because they didn’t receive a payment for economic impact or they didn’t receive the full amount.
The fastest way to get a refund is by electronic filing and direct deposit. Most refunds are issued in less than 21 days, however some refunds may take longer due to various reasons. Taxpayers can request their refund using Where’s My Refund? Follow up. on IRS.gov or by downloading the IRS2Go mobile app, where you will receive a personalized refund date once the tax return has been submitted electronically.
Most early earned income / additional tax credit for children should have an update on “Where’s my Refund?” Until February 22nd. The IRS can only respond to requests about refund status if the return was submitted electronically 21 days ago.
IRS Tax Help is available 24/7 on IRS.gov, where people can find answers to tax questions and solve tax problems online from the security of their home. The Let’s Help You page will help answer most tax questions, and the IRS Service Manual PDF links point to other important IRS services.