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U.S. President for Tax Reform Grover Norquist discusses President-elect Joe Biden’s tax agenda with a Democrat-controlled Congress.
The U.S. government has delayed the start of this year’s tax filing season, which could be an early indication that the pandemic could once again confuse the process for many U.S. taxpayers.
Instead of opening at the end of January, the IRS will begin accepting returns on February 12 – a decision that was made, in part, to give the agency time to send another round of payments to ‘economic impact.
As previously reported by FOX Business, National Taxpayer Advocate Erin M. Collins has warned that some of the challenges created by the pandemic in 2020 will continue into the 2021 production season, and “perhaps for months to come.” more”.
Here are a few things to know about the upcoming depot season:
You don’t have more time to deposit
Even though the filing period begins a little later than usual, tax returns will retain their original due date of April 15.
Last year marked the first time the IRS has delayed the filing deadline – taxpayers had until July to file their returns.
IRS STILL PROCESSED MILLIONS OF INDIVIDUAL PROFESSIONAL TAX RETURNS FROM THE LAST SEASON OF FILING
Unemployment taxes
Many people lost their jobs in 2020 and became eligible for increased unemployment benefits, but some people were unaware that these benefits counted as taxable income.
The IRS requires people to report income received as unemployment.
Failure to do so could result in taxes owed to the IRS, and failure to pay could result in penalties and potential interest.
Others were unaware that taxes are not automatically withheld.
A fixed federal tax rate of 10% can be withheld from paychecks of beneficiaries.
If you don’t have taxes withheld from your checks, you may need to make estimated quarterly payments to the IRS. These payments are generally required of individuals who expect to pay income tax of $ 1,000 or more when filing their return.
Unemployment income and withheld taxes will appear on a 1099-G slip which is usually mailed at the end of the year.
Stimulation control fees
Stimulus payments do not count as income and you do not owe taxes on direct payments.
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Haven’t received your stimulus money?
If you are among the Americans who did not receive stimulus funds – some or all of the checks to which you are entitled – you must claim them through the Recovery Rebate Credit on your 2020 Form 1040 or 1040-SR.
You can also claim this credit if you have not received the full amount owed to you.
The IRS asks people in this situation to file and claim the credit even though you normally don’t have to file your taxes.
The backlog
Tax season 2021 is fast approaching, but the IRS still has unopened tax returns from last year.
As of December 25, 2020, 6.9 million personal income tax returns were “in process”.
In some cases, these statements were dated April 15.
Unless there is a problem with your return, the agency says no action can be taken by the individual.
“We are working hard to overcome the backlog. Please do not file a second tax return or contact the IRS regarding the status of your return, ”the IRS website states.
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