Americans for Tax Reform President Grover Norquist discusses President-elect Joe Biden’s tax agenda with a Democratic-controlled Congress.
The US government delayed the start of this year’s tax reporting season, which could be an initial indication that the pandemic may once again disrupt the process for many U.S. taxpayers.
Instead of opening in late 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 economic impact payments.
As previously reported by FOX Business, National Taxpayer Attorney Erin M. Collins has warned that some of the challenges created by the pandemic in 2020 will continue until the 2021 filing season, and “possibly for more months”.
Here are some things you should know about the upcoming filing season:
You don’t have extra time to file
Although the filing season starts a little later than usual, tax returns will retain the original due date of April 15th.
Last year marked the first time the IRS delayed the filing deadline – taxpayers had until July to file their statements.
THE IRS STILL PROCESSED MILLIONS OF INDIVIDUAL AND BUSINESS TAX RETURNS FROM THE LAST ARCHIVING SEASON
Unemployment tax
Many people lost their jobs in 2020 and became eligible for expanded unemployment benefits, but some people were unaware that those benefits were counted as taxable income.
The IRS requires people to report income received in the form of unemployment.
Failure to do so may result in taxes due to the IRS, and failure to pay may result in potential fines and interest.
Others were unaware that taxes are not automatically withheld.
A fixed 10% federal tax rate can be withheld at the source of the beneficiaries’ paychecks.
If you do not have taxes withheld on your checks, you may need to make a quarterly estimate of payments to the IRS. These payments are typically required from people who expect to have to pay taxes of $ 1,000 or more when their claim is filed.
Unemployment income and taxes withheld will appear on a 1099-G statement, which is usually mailed at the end of the year.
Stimulus verification taxes
Stimulus payments do not count as revenue and you do not owe taxes on direct payments.
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Didn’t you get your stimulus money?
If you are one of the Americans who have not received stimulus money – any or all of the checks for which you are eligible – you must claim them through the Recovery Discount Credit on your 2020 Form 1040 or 1040-SR.
You can also claim this credit if you have not received the full amount due.
The IRS is asking people in this situation to file and claim credit, even if you don’t normally need to file taxes.
The accumulation
The 2021 tax season is coming, but the IRS still has unopened tax returns from last year.
As of December 25, 2020, it had 6.9 million individual tax returns “in process.”
In some cases, these statements were dated April 15.
Unless there is a problem with your return, the agency says there is no action the individual can take.
“We are working hard to overcome the accumulation. Do not complete a second income tax return or contact the IRS about the status of your return, ”states the IRS website.