With tax season set to begin next week, it can sometimes leave many taxpayers with questions. Along with the same questions that get asked every year, COVID-19 has brought about more questions after its impact last year. One COVID-19 related change is the beginning of the filing day now kicks off on Feb. 12, two weeks later than usual. From dates, assistance, stimulus checks, and more, here are five things you should know this tax season.
1 How To File
For some, this might not have changed. You may still go down to your local tax person, H&R Block, etc.; however, after large unemployment numbers in 2020, many may not have this option.
For those who fall into this category, you have options both online and locally.
The IRS has set up the IRS Free File Program, which allows those with an annual gross income less than $72,000 to file their taxes electronically for free.
The various software offered for the Free File Program is put together through “a partnership between the IRS and many tax preparation and filing software industry leaders,” according to the IRS.
There are still options for those who made more than $72,000, with certain caveats in place.
For more information on the Free File Program, you can visit the official IRS website.
Moving over to a more local option, Watonga’s own Opportunities, Inc. is providing free assistance for filing taxes electronically as well. Those with a $57,000 or less gross income qualify for the assistance.
“We are strictly doing drop-off only. [People] are more than welcome to call to get a packet or they can come by and get one,” Shannon Sattler Fiscal Officer for Opportunities, Inc. said. “Then they can drop their taxes off, we will work on them, and call them when they're done. We do not submit any taxes without the authorization of the client.”
2 Important Dates to Know
As mentioned, Feb. 12 is the beginning of the filing period for this tax season.
However, since Jan. 15, people have been able to file their returns through the Free File Program. The returns will not be submitted until Feb. 12.
The IRS’s Where’s My Refund tool is set to be updated and ready to use on Feb. 22.
As for when you'll receive your return, according to the IRS, the first week of March is when returns will start to arrive for those claiming earned income tax credit and additional child tax credit. This estimated date only applies to those who filed electronically, have direct deposit set up, and had no issues with their taxes.
Lastly, the deadline to file your taxes this year is April 15; however, anyone who requested an extension on their 2020 tax returns has a deadline of Oct. 15.
3 Stimulus Checks
Many have received their stimulus checks from December’s stimulus bill (as well as early last year in March) in the mail or by direct deposit. For those who have, that money is not taxable income and will not impact your tax return.
However, there are still Americans waiting to receive their latest stimulus checks. If this is the case, then you may claim this missing money as a Recovery Rebate Credit.
Those filing for a Recovery Rebate Credit may see the stimulus money they are owed in addition to their normal tax return.
“[The IRS] has said they're not going to take it for back taxes or student loans. If you owe back child support, your stimulus check would be sent to the party that has the child or to reimburse the DHS,” William K. Gauer of William K. Gauer CPA in Watonga said.
Although, according to Fox Business, “some individuals may not get the full $600 payment if they owe back taxes.”
If someone owes $1,000 but has received a $1,200 stimulus check credit, said individual could possibly only receive a $200 return.
4 Unemployment “Unemployment and even the
“Unemployment and even the increase in unemployment benefits due to COVID is all going to be taxable income,” Gauer said.
When filing for unemployment benefits, individuals are able to choose whether to have taxes withheld from said benefits. Although, according to the IRS, many people don't opt-in for tax withholding.
According to CNN Business, “if someone had other sources of household income, such as a spouse's paycheck, their total tax liability may be higher than normal.”
This does not exactly mean that people will now owe money to the IRS. It could simply be that their tax return will be reduced from what it has been in years past.
5 How To Track Your Return
As soon as 24 hours have passed after you’ve filed your taxes electronically, you will be able to begin tracking your tax return.
The IRS offers a Where’s My Refund tool to allow people to track their refunds. You’ll need your Social Security number or Individual Taxpayer Identification Number, filing status, and exact refund amount in order to use the tool. The IRS2Go app can also be used to check your refund status.
The Where’s My Refund tool is set to be updated and ready to use on Feb. 22.
The IRS has said it expects nine out of 10 taxpayers to receive their refund within 21 days of filing electronically.
Paper filings are discouraged by the IRS if possible as it could lead to a delay in you receiving your return.