Americans have about a month left to file their 2020 tax returns. What now
If you haven’t filed your 2020 tax return, you’re in luck – you have more than a month to file your filing with the IRS.
The IRS has moved the filing deadline for single returns from April 15th to May 17th this year.
Additionally, May 17th will be the last day of contributing to Individual Retirement Accounts, Roth IRAs, and Health Savings Accounts, as well as Archer Medical Savings Accounts and Coverdell Education Savings Accounts for 2020.
The tax season has been a complicated one for many Americans. The American Rescue Plan made changes to the tax number after the IRS began accepting returns, while also hiring the agency to send out another round of checks for $ 1,400.
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The changes resulted in many having to hold back on filing their returns in order to delay refunds or even previous stimulus payments that they owed and did not receive.
The IRS and state finance ministries are still sending out guidelines to some taxpayers throughout the season, adding to the tension as the filing deadline approaches. Still, many taxpayers shouldn’t worry too much, according to Adam Markowitz, a registered agent with Howard L. Markowitz PA CPA in Leesburg, Florida.
“Everything gets done and if it isn’t done it’s not the end of the world,” he said.
Here are some things to know before creating a file.
Bring your records together
As a rule of thumb, before filing, you should check the last year’s return to make sure you don’t miss any documents that should be included.
“That way, you can file in time knowing you’re not leaving [out] All other parts and the state and federal government all have all the information you need to file your tax return, “said Sheneya Wilson, CPA and founder of Fola Financial in New York.
There are a few extra things some taxpayers need this year.
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 applying together if both partners are unemployed – are non-taxable for those who had adjusted gross income less than $ 150,000 in 2020.
Those who have had unemployment income should make sure they have a 1099-G from their state before filing a federal return and that they have correctly deducted the non-taxable income.
Most who filed prior to the updated rule don’t need to take any further action to get back the taxes they paid on unemployment income, which should have been sent in May exemption.
In some cases, the IRS said taxpayers may need to file an amended declaration to ensure they get the tax break.
Additionally, if you should have received one of the previous stimulus payments but didn’t receive them, you will need to apply for a refund discount to receive the cash for this year’s return.
Note the deadlines, which are different from May 17th
To be sure, some taxpayers have to meet the original April 15th deadline. The first estimated quarterly payment made by individuals with income from self-employment, interest, dividends, rent and maintenance is due on April 15th.
In addition, some states have deadlines for filing taxes that differ from the due date for federal returns. Hawaii taxpayers must file their state tax returns by April 20, while Oklahoma and Maryland taxpayers have June 15 and July 15, respectively.
And those hit by winter storms in Texas, Oklahoma, and Louisiana have until June 15 to file their taxes after the Federal Emergency Management Agency issued disaster statements.
For most federal states, however, the state deadline also ends on May 17 to comply with the federal government and make it easier for taxpayers to complete it at the same time.
Late filing can result in penalties and interest for those who owe taxes incurred after the deadline, Wilson said. However, if, like most Americans, you owe a refund, no penalty is deducted from the amount you receive and you have up to three years to claim the money.
File if you can
Filing as soon as possible is the fastest way to get a refund owed and can protect against fraud, according to Wilson.
“To make sure your tax refund gets to you, you want to file it as early as possible because the IRS works on a first-come-first-come basis depending on your taxpayer ID number, which is a Social Security number. serve first “accepted number,” she said.
The IRS had received more than 93 million tax returns for 2020 and processed nearly 84 million as of April 2. To date, the agency has shipped more than 62 million refunds with an average refund of $ 2,893.
Taxpayers shouldn’t necessarily rush to file files, said Markowitz of Howard L. Markowitz PA CPA.
It is far more valuable to make sure your tax return is done correctly than it is now
registered agent, Howard L Markowitz PA CPA
For example, those who have not yet received a stimulus payment and would like the IRS to use their 2019 information should send their 2020 return back to the agency, Markowitz said. Once they have received payment they can go ahead and submit.
Others may also be waiting for unemployment income guidelines or other regulations from their state, which means they should wait to submit.
And if you can’t file your return with the IRS by May 17th, it’s easy to apply for an extension so you can file your 2020 taxes by October 15th.
According to Markowitz, if you make sure they’re done correctly, you can avoid the costly process of changing a return in the future.
“It is far more valuable to make sure your tax return is done correctly than it is now,” said Markowitz.
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