Many Americans and their accountants have had a happy break – they now have an extra month to file 2020 taxes.
The Department of Treasury and Treasury has extended the deadline for submission for individuals from April 15 to May 17.
The move comes after calls increased to extend the tax season, which began later than usual to accommodate the third-round stimulus payments, which the IRS distributes.
From this year to March 12, according to the agency, the IRS received more than 66 million individual income tax returns and processed more than 58 million. They also sent out more than 42.5 million refunds, most of which were deposited directly into taxpayers’ bank accounts. The average repayment so far is $ 2,967.
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Taxes submitted on time are very important to many this year. This is the only way to get a refund if you owe it. It is also how many Americans can claim previous stimulus payments for which they were eligible but did not receive.
The pandemic has complicated this year’s filing, and the $ 1.9 billion U.S. bailout plan signed in early March has made changes affecting tax filing in the middle of the season.
“It’s obviously something very different, this year than any of us have ever had to deal with,” said Adam Markowitz, an enrolled agent at Howard L Markowitz PA CPA in Leesburg, Florida.
Here are some things to check before submitting the file.
Stimulus payments
If you had a drop in income in 2020 that you would be eligible for any previous stimulus payments, or if you had a baby that changed how much you had to get, you must file a tax return and the story claims rebate credit to to get that money back.
If you are eligible for the latest amount of $ 1,400 in the U.S. rescue plan, you must also file your 2020 tax return so the IRS has up-to-date information and can send you a direct deposit, paper check or debit card.
While this is the only way to get the payment, you do not necessarily have to file if you are not ready yet – the IRS said it will examine both tax returns for 2019 and 2020 and supplement people who are eligible for checks or would have received more based on 2020 returns.
Unemployment income
If you received unemployment insurance benefits in 2020, the U.S. bailout plan made changes to what is considered taxable income. Now the first $ 10,200 of these benefits – or $ 20,400 for a couple filing jointly while both partners are unemployed – is not taxable for those who adjusted their gross income to less than $ 150,000 in 2020.
It will save millions of Americans from a surprising tax bill during a difficult time. The IRS has issued a worksheet for paper files to claim tax deductions, and is working with the tax software industry to update online systems, which means taxpayers need to make sure they have the right forms before filing.
This can put some in a difficult situation, especially if they have to claim extra stimulus payments or wait for their tax refund.
In addition, the IRS said that for those who had unemployment income by 2020 and have already filed and paid taxes that they no longer owe, no further action is needed. The agency plans to automatically process refunds for these individuals.
It’s a bad year to try to do taxes on your own, because you have to be with someone who knows exactly what they’re doing.
Adam Markowitz
registered agent, Howard L Markowitz PA CP
Now there is more time to submit
To be sure, not all taxpayers are subject to the new May 17 deadline. Those who make estimated tax payments have another April 15 deadline to submit the money.
And the new date only applies to federal taxes. States set their own deadlines and may not extend their seasons with the federal government.
Furthermore, the IRS did not push back the extension period. If anyone needs even more time to file their taxes, they must submit a Form 4868, which they have until October 15 to file their 2020 return. However, taxes due to the IRS are still payable on May 17th. If you pay it later, it can result in fines and interest.
This year, experts recommend that taxpayers should seek professional help, especially if they have had situations such as unemployment income that would complicate the return.
“It’s a bad year trying to do taxes on your own because you have to be with someone who knows exactly what they’re doing,” Markowitz said.
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