Many Americans have an extra month to file their 2020 taxes. Don’t miss out on these savings
Many Americans and their accountants have been lucky – they now have an extra month to file taxes for 2020.
The Internal Revenue Service and Treasury extended the registration period for individuals from April 15th to May 17th.
The move came after calls increased to extend the tax season, which started later than usual to accommodate the third round of stimulus payments distributed by the IRS.
This year, as of March 12, the IRS has received more than 66 million individual income tax returns and processed more than 58 million, according to the agency. They have also sent more than 42.5 million refunds, most of which were deposited directly into taxpayers’ bank accounts. The average refund so far is $ 2,967.
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Filing taxes on time is extremely important for many this year. This is the only way to get a refund if you owed one. It’s also how many Americans can claim previous stimulus payments that they were entitled to but weren’t given.
The pandemic has made this year’s filing process difficult, and the US $ 1.9 trillion bailout plan that went into effect in early March has made changes that will affect its mid-season tax returns.
“This is obviously a very different year this year than anything any of us have ever looked at before,” said Adam Markowitz, a registered agent with Howard L. Markowitz, PA CPA in Leesburg, Florida.
Here are some things to check before you submit.
If you’ve had a drop in income in 2020 that would have put you in question for previous stimulus payments, or if an event like the birth of a child should have changed the amount of your income, you’ll need to file a tax return and apply for the discount credit claim back to get that Get money back.
If you’re eligible for the final payment of $ 1,400 on the American Rescue Plan, you’ll also need to file your 2020 tax return so the IRS has your updated information and can send you a direct deposit, check, or debit card.
While this is the only way to get payment, there is no need to hurry if you are not ready. The IRS said it would review both 2019 and 2020 tax returns and charge individuals who were eligible for payment reviews or gotten more based on 2020 returns.
If you received unemployment insurance benefits in 2020, the American rescue plan made changes to taxable income. Now, the first $ 10,200 of those benefits – or $ 20,400 for a couple who file an application together when both partners become unemployed – are non-taxable for those who adjusted their gross income by less than $ 150,000 in 2020.
This will save millions of Americans from a surprising tax burden during a difficult time. The IRS has published a paper binder worksheet to claim the tax break and is working with the tax software industry to update online systems. This means that taxpayers should make sure they have the correct forms before filing.
This could put some in a difficult position, especially if they need to apply for additional stimulus payments or are waiting for their tax refund.
Additionally, the IRS said no further action is required for those who had unemployment income in 2020 and have already filed and paid taxes that they no longer owe. The agency plans to automatically process refunds for these people.
It’s a bad year collecting taxes on your own because you need to be with someone who knows exactly what they’re doing.
registered agent, Howard L Markowitz PA CP
Now there is more time to cast off
Of course, not all taxpayers are subject to the new May 17th deadline. Those making estimated tax payments still have a first quarter deadline of April 15 to submit the money.
And the new date only applies to federal taxes. States set their own time limits and may not be able to extend their seasons in accordance with the federal government.
In addition, the IRS has not postponed the extension period. If someone needs even more time to file their taxes, they must file a Form 4868 which gives them the opportunity to file their 2020 declarations by October 15. However, any taxes owed to the IRS are still due May 17th, and payment later may result in penalties and additional interest.
This year, experts are recommending taxpayers to seek professional filing help, especially if they have had situations like unemployment income that would make their returns more complex.
“It’s a bad year to raise taxes yourself because you have to be with someone who knows exactly what they’re doing,” said Markowitz.
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