Tax season is upon us yet again, but to give everyone a little more time this year, the International Revenue Service recently announced that the deadline for filing your 2020 taxes is May 17 instead of April 15, as a result of the pandemic, according to The New York Times.
The extension is to help those who faced economic hardship during the coronavirus pandemic, the New York Times reported.
“This continues to be a tough time for many people, and the I.R.S. wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic,” Chuck Rettig, the I.R.S. commissioner, said in a statement.
In 2020, as the pandemic raged to uncertain levels, the IRS allowed taxes to be filed as late as July.
If you haven’t filed yet, here are some quick tips to help you through the process.
Do Direct Deposit
Direct deposit is the fastest way to get your money after you file, according to the IRS. Those who file electronically will get a refund in 21 days, the New York Times said.
“Filing electronically with direct deposit is the quickest way to get refunds,” Rettig said.
Unemployment
If you are unemployed, a new law signed by President Joe Biden in the American Rescue Plan recently made the first $10,200 of unemployment benefits received in 2020 tax-free for people with incomes of less than $150,000.
What to do if you are married and unemployed? Should you file jointly with your spouse? These questions recently came up on KARE 11 in Minnesota.
“So now we’re talking to people about whether they should be filing married or separate, because maybe you put their two salaries together and you’re over $150,000, then you have no unemployment that’s not taxable. Where if you file separately you could have $20,400 — In other words both of you have a $10,200 exception. Some really unique things are happening right now,” Todd Koch, a partner at JAK +Co Certified Public Accountants, told KARE 11.
Forbes magazine wrote that if you received unemployment benefits in 2020, you should look to obtain Form 1099-G from your state.
Social Security
Nearly 1 in every 2 senior citizens will pay federal income taxes on a portion of their social security, according to USA Today.
The IRS says that this usually happens only if you have other substantial income in addition to your Social Security benefits, like wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return.
If you are filing for your tax return and are single and collecting Social Security, USA Today reports that if you make between $25,000 and $34,000, you have to pay income tax on up to 50% of your benefits. If you make more than $34,000, up to 85% of your benefits may be taxable.
If you are filing a joint return with your spouse and collecting Social Security benefits, USA Today reports that if you make between $32,000 and $44,000, you have to pay income tax on up to 50% of your benefits. If you make more than $44,000, up to 85% of your benefits may be taxable.
Stimulus Checks
The IRS announced that all first and second stimulus checks have been sent, so if you didn’t receive your stimulus payments or received a partial payment, you will have to claim them on your 2020 tax return, Forbes reported.
If, however, you did receive a stimulus check, don’t worry — you won’t be taxed on it.
“You will not pay tax to the federal government on them and you will not have to repay monies received,” Koch told KARE 11.
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