Tax Filing Season Begins February 12
Tax Tips & Information for Filing Your 2020 Income Tax Return
The IRS announced that the 2021 tax filing season will begin on Friday, February 12th. This start date is slightly later than usual, however, the IRS needed the extra time to switch gears from integrating new COVID-relief tax laws and distributing Coronavirus stimulus checks.
Here is some important information about the upcoming filing season, as well as tips for preparing your tax return and getting a tax refund.
Gather Your Tax Documents
The IRS encourages taxpayers to organize their tax records in preparation for filing their 2020 income tax return (Form 1040 or Form 1040-SR). You should be keeping all the necessary records in a secure place – including any W-2s, 1099s, receipts, and documents that support income, tax credits, or tax deductions.
Most taxpayers will receive the following income-related documents around the end of January:
- Form W-2 (Wage and Tax Statement)
- Form 1099-MISC (Miscellaneous Income)
- Form 1099-INT (Interest Income)
- Form 1099-NEC (Nonemployee Compensation)
- Form 1099-G (Certain Government Payments; like unemployment compensation or state tax refund)
- Form 1095-A (Health Insurance Marketplace Statements)
Staying organized will help you prepare an accurate tax return and avoid any delays when you file.
RELATED: Common Tax Questions & Answers
Double-Check for Missing or Incorrect Forms
Some regions are experiencing mail delays, so it’s important to make sure that you have all your necessary tax documents before you file a tax return. Note that some forms may be available to you online.
If you haven’t received a W-2 or Form 1099 from your employer, you should contact your employer (or the payment issuing agency) directly to request the missing documents. If you received a W-2 or Form 1099 with incorrect information, you should contact your employer or payer to resolve the issue. If you cannot get in touch with your employer, you will still need to file your tax return by the deadline (April 15).
You may need to use Form 4852 (Substitute for Form W-2 or Form 1099-R) or Form 1099-R (Distributions from Pensions, Annuities, IRAs, etc.) so you don’t file an incomplete return. If you end up receiving your missing/corrected W-2 or Form 1099-R after you file and the information is different than what you reported, you will need to file an amended tax return (Form 1040-X).
New IRS Form for Self-Employed to Claim COVID-19 Tax Credits
There is a new IRS form available for self-employed individuals who are qualified to claim COVID-related sick and family leave tax credits. These tax credits were created by the Families First Coronavirus Response Act (FFCRA), which was passed in March 2020. Qualified individuals who are unable to work due to COVID-19 may be able to claim refundable tax credits to help offset their federal income tax.
Form 7202 (Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals) is designed to help eligible taxpayers determine their qualified sick and family leave equivalent tax credits. These credits can be claimed for leave that was taken between April 1, 2020 and December 31, 2020 (for a 2020 tax return) and between January 1, 2021 and March 31, 2021 (for a 2021 tax return).
Tips for Easy Filing
To speed up the filing process, the IRS recommends that you follow these easy steps:
- File electronically/online
- Use the Direct Deposit option for a faster tax refund
- Check the IRS website for the latest tax news and information
- Review the guidelines for the Recovery Rebate Credit, which is designed for people who were eligible for a stimulus check but did not receive one (or did not receive the full amount they’re qualified for)
Also remember that the deadline to file your 2020 tax return is April 15, 2021.
If you cannot file your tax return by the April 15 due date, you can file a tax extension and get 6 extra months to file. However, it’s important to remember that an extension only gives you more time to file, not to pay. You are still expected to pay your taxes by the original April 15 deadline if you want to avoid penalties and interest.
Coronavirus Tax Relief
There are a number of COVID-19 tax relief options available for eligible individuals and businesses. Two new employer tax credits – the Credit for Sick and Family Leave and the Employer Retention Credit – are available to help businesses that have been severely impacted by the Coronavirus crisis.
Thanks to the two major stimulus packages that were passed in 2020, many individuals have received stimulus checks (i.e. Economic Impact Payments) for $1,200 and $600. There are also negotiations taking place on Capitol Hill regarding a third COVID-relief bill and another round of stimulus payments.
Check back for more news and updated information as developments continue.
RELATED: Stimulus Check Update