Tax season is upon us. Like nearly every facet of our lives, 2020 taxes have been impacted by COVID.
Warning 1: E-File may be your best friend this year, as there is a backlog in processing Paper returns. It’s been widely reported and confirmed by the IRS, that there are still millions of 2019 tax returns awaiting processing by the IRS. This means untold numbers of Americans’ who anticipated a refund based on their 2019 taxes have not received their refund yet. If it’s possible for your return, begin now to research options to e-file and keep the paper for your home file.
Warning 2: The COVID stimulus and reliefs acts have brought a lot of changes to the tax code this year. We have seen two rounds of economic impacts/stimulus payments and recovery rebates for those with payment issues, a payroll tax deferral-which has come and gone, expanded unemployment benefits and a larger number of unemployment claims. See more tax changes from 2020 here. If 2020 brought considerable changes to your personal or business financial and tax position this may be the year to seek out additional tax assistance.
If the 2020 tax year has you looking for additional assistance, here’s some resources to consider.
Resource 1: Tax professionals, who are credentialed with the IRS. According to Better Financial Counseling Network’s, Jerry Zeigler, an Enrolled Agent (the highest credential the IRS awards), ”engaging a tax professional can make a lot of sense when your tax situation changes into something you are not familiar with.” This could also be an opportunity to check on how you have been filing returns, to see if you have been making any errors.
The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications is a free searchable and sortable database. It includes the name, city, state and zip code of credentialed return preparers who are CPAs, enrolled agents or attorneys, as well as those who have completed the requirements for the IRS Annual Filing Season Program. https://irs.treasury.gov/rpo/rpo.jsf
Coming Soon: Learn more about choosing a tax professional at: Taxes: Tips and Red Flags when Choosing a Professional
Resource 2: The IRS Free File Program provides two ways for taxpayers to prepare and file their federal income tax online for free:
Traditional IRS Free File provides free online tax preparation and filing options on IRS partner sites. Please note, only taxpayers whose adjusted gross income (or AGI) is $72,000 or less qualify for any IRS Free File partner offers.
Free File Fillable Forms are electronic federal tax forms you can fill out and file online for free. If you choose this option, you should know how to prepare your own tax return. Please note, it is the only IRS Free File option available for taxpayers whose income (AGI) is greater than $72,000.
Resource 3: The IRS’s Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free basic tax return preparation to qualified individuals.
The VITA program has operated for over 50 years, offering free tax help to:
People who generally make $57,000 or less, Persons with disabilities; and Limited English-speaking taxpayers
In addition to VITA, the TCE program offers free tax help, particularly for those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors. Unfortunately due to COVID-19, many of these sites are closed. Some sites have changed their service to drop off tax return preparation instead of in person. Please see https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers
When can you file your taxes? The IRS is accepting returns for the 2020 Tax Year, beginning February 12, 2021.
Money questions? We have answers. Learn more about us at: Meet Us (You’ll be glad you did.)
Tax resources exclusively for the military: Taxes: Free help for Military Members (Active Duty, Guard and Reserve) – Better Financial Counseling Network
Photo by Kelly Sikkema on Unsplash