The delay of the 2020 tax season is just one of many changes tax filers and preparers will experience this year when filing your federal tax return with the I.R.S.
“Tax year 2020 will not be just look at last year’s tax return, drop that information in and it’ll be the same,” says Tax Information Officer Mark Steber, Jackson Hewitt Tax Service.
The decision was made by the I.R.S. to delay tax season, changing the start date to February 12th. This change was made to align with tax changes approved by Congress. However, you’ll still need to file and pay what you owe by April 15th as of now.
“The I.R.S. is starting about 3 weeks later processing tax returns. What that typically means for most Americans is there will be a three-week lag before the I.R.S. actually starts processing and sending tax refunds” says Steber.
Although this gives filers more time to prepare, Steber recommends starting as soon as you receive your information.
“Get them done now, earlier is better as we always said because if you’re due a refund, you get a refund earlier,” says Steber.
Another concern some filers may have is what should be noted on tax returns as far as extra income sources from the pandemic. Furthermore, significant life changes can affect what you will need to note on your tax return. “This year you’re going to have many new items regardless of your socioeconomic demographic status, high income, low income, middle class income; everyone’s tax return will look different this year, “says Steber
One filer expressed her confusion particularly about unemployment payments that were given to those who lost their jobs from the pandemic.
“I feel like everyone that was unemployed for the duration of the pandemic. It’s unknown how the government will handle unemployment when it comes to tax refunds. No one really knows if we’re going to have to pay back a certain amount of unemployment received so I feel like that’s a big concern with filing,” wonders Lakyn Hauptman, tax filer.
If you have received unemployment benefits in 2020, you will need to note that on your tax return. You may also owe money upon filing for this reason.
“60 million people received unemployment benefits. That is taxable and must go on your tax return. If you leave it off, the I.R.S. will know and they’ll typically send you a note,” Says Steber.
If you have received both of your stimulus payments, should you note those on your return?
Steber says, ”Those are not taxable, if you put those on your tax return as taxable, you’ll pay tax on them.
What if you have not received a payment, or the full stimulus amount(s)?
Steber says that should be noted on your return.
“If you didn’t get all of your money or if you benefitted from one of the late tax law changes and you’re due more stimulus money, you will need to put that on your tax return,” says Steber.
There are other situations besides the pandemic help money that you’ll need to note on your return:
“In 2020, if you had a new baby, adopted a baby, fostering a child, that’s due another $1100 in stimulus money that you would have no way received in the past. There were also a couple of law changes. For those who had I-10’s or individual tax ID numbers, they did not get the first set of stimulus payments. They can now go put money on their tax return if they were disqualified,” says Steber.
Hauptman usually independently files her taxes, but all the unknowns from this year has her thinking differently.
“Typically, I don’t use a tax preparer, but I feel like this upcoming tax season it would be smart to just because we don’t really know what’s behind the scenes with filing taxes,” says Hauptman.
Steber also recommends having a tax preparer help this tax season due to all the changes, and so you’re sure you are receiving all your funds that you are due. He mentions if you leave something off, it will stay off, and the I.R.S. is not responsible for making sure you have everything noted on your return that adds to your refund.
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