If you’re self-employed and have more room for retirement savings, you can still open and fund a SEP-IRA for 2020 through April 15. I've written for Forbes since 1997. This story is frequently updated with the latest information. Here's how to calculate the payments you were owed: Next, you'll want to check your bank account where your payments were deposited to determine the amount you received. The fastest way to get your money is to file electronically and have the funds deposited in a bank account. For 2020, the limit on annual contributions to an IRA (pretax or Roth or a combination) is $6,000, plus a $1,000 catch-up contribution allowed if you’re 50 or older. For 2020 and later, there is no age limit on making IRA contributions. However, if you're mailing documents to the IRS, expect massive delays. “I can’t stress enough the importance of filing electronically and choosing direct deposit. ... 5 ways COVID-19 could affect your tax return. Note that you may owe some tax on your COVID benefits depending on your total 2020 income. For 2020, the maximum contribution amount is $3,550 for individual coverage, or $7,100 for family coverage, plus a $1,000 catch-up if you’re 55 or older. tool on the IRS website lets you plug in your name, filing status and refund amount to check on the status. With Congress Debating Round 3 Stimulus Payments, Should You Rush Or Wait To File Your 2020 Return? You are a … All Rights Reserved, This is a BETA experience. If you made cash gifts to charities in 2020, there’s a new $300 above-the-line charitable donation deduction per tax return. That's frustrating for the millions of taxpayers who traditionally are early return filers. If you have a hig-deductible health plan, you can contribute to a health savings account and get a triple tax benefit. Federal income tax refunds will be delayed significantly in 2021 after the Internal Revenue Service announced a date for starting processing returns. This is the day designated by the U.S. government as the day taxes are due each year. IR-2021-16, January 15, 2021 WASHINGTON ― The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns. April 15, right now, is the deadline for submitting your tax return this year. For example, if your income was lower in 2020 than 2019, you may be owed a partial credit. The IRS will start accepting tax returns for the 2020 tax year on February 12, 2021. If you got a refund, especially a big one, you can use the IRS tax withholding estimator to determine how much tax to withhold from your paycheck. You should have received a Form 1099-G showing the amount you were paid and any federal income taxes withheld. (Note for planning charitable gifts for 2021: There’s a new $600 charitable tax deduction for 2021.). But there are also benefits for the tens of millions of people who'll be eligible for a third stimulus payment of up to $1,400 per person -- a stimulus check that may arrive sooner than you think. The IRS says that paper-filed tax returns and paper checks will take even longer this year. Lump Sum Investing—How To Decide, Investment Fees Can Invalidate The 4% Rule, Master List Of All Major International Airline Coronavirus Change And Cancellation Policies, How A 1% Investment Fee Can Wreck Your Retirement, IRS Mistakenly Tells 109,000 Taxpayers It Held Back Stimulus Payments To Offset 2007 Taxes, State Death Tax Hikes Loom: Where Not To Die In 2021, new $600 charitable tax deduction for 2021. If one of your previous stimulus checks was mistakenly reduced, you can claim the difference as a tax credit when you file this year. Gig work is taxable. The IRS should've sent you a letter within 15 days of issuing your stimulus check, however it was issued, and that letter should show how much money you received. File electronically and use direct deposit. Unlike last year, the IRS has NOT extended the tax return deadline in 2021. We suspect the same will be true with the third stimulus check of up to $1,400 per person (read about why the new check might be "targeted"). By filing now, you could also set yourself up so you don't have to wait until 2022 to claim any additional stimulus money from a potential third check. That means you can make 2020 contributions through April 15, 2021. That's a great reason to file early every year. Note: The enhanced retirement plan distribution rules were not extended for 2021 in the year-end 2020 tax package. You can make tax year 2020 contributions to an Individual Retirement Account through April 15, 2021, and take a tax deduction if you’re eligible. But you have a handful of good reasons to beat that April 15 date, besides taking care of the filing burden sooner rather than later. The Internal Revenue Service says taxpayers should expect limited face-to-face operations, heavy call volume and paper-processing delays as it opens today for tax season 2021, accepting tax returns for tax year 2020. If you're an early bird when it comes to filing your tax return, you won't have to wait much longer before the IRS will accept your return. According to the latest proposal -- which is not law -- the IRS would base your third stimulus payment on your 2019 or 2020 taxes, whichever it has most recently on record. Yes, it's that simple. So, if you were to owe $1,000 in taxes and you're missing $500 in stimulus check money, you'd only owe $500 instead of $1,000.). Let's say you made less money in 2020 than in 2019, or you had a new baby in the last year. If you didn’t get a 1099-G, check your state’s unemployment compensation website to access it. Congress passed a law that requires the IRS to HOLD all tax refunds that include the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) until February 15, 2021, regardless of how early the tax return was filed. You can provide routing information for up to three accounts—even retirement accounts—on your tax return to which the IRS can send your refund. There's also a form to help you figure out the amount you're owed on page 59 of this PDF detailing instructions for 1040 and 1040-SR tax forms, but it's a doozy to follow. Early tax returns can be lodged before 01 July only in two special cases: 1. 4 reasons you'll want to file your taxes early in 2021 Benefit 1: The earlier you file your taxes, the sooner you'll get your tax refund (you can estimate the total here). Save on time and effort by filing your tax return early. You need proof of your gift. When is Tax Day 2021? Follow me, I cover personal finance, with a focus on retirement planning, trusts and estates strategies, and taxwise charitable giving. Doing your taxes is easier than you think. Here’s a guide to some key issues. Benefit 2: Since any missing stimulus check money is also tied to your tax return this time around, filing early will mean you get any missing stimulus money faster, too. Taxpayers have until Thursday, April 15, to file their returns and pay any tax owed. The basic rule is this: Individuals must file a tax return if they have net earnings from self-employment of $400 or more from gig work, even if it’s a side job, part-time or temporary. IRS encourages early filing of 2020 tax returns It’s time to start thinking about your 2020 tax returns. To figure out whether and how much money you're owed from a previous round of stimulus checks, you first have to determine how much you were owed for each previous payment, then subtract from that any amount you already received. You may opt-out by. February 11, 2021 5 Tips for Finding a Tax Preparer The deadline isn't until April 15 to submit your tax return, but 2021 isn't the year to wait around to file. From there, it could take anywhere from one to three days for the money to appear in your bank account. Tweak tax payments for 2021. Here's why you'll want to act quickly. “Now we’re back to the standard hardship rules and standard plan loan rules.”. Don’t procrastinate or else pay late filing penalties. If you picked up a side job during the pandemic, you have to include it on your tax return as self-employment income. The sooner you file your taxes, the faster you could see that stimulus cash. For gifts of $250 or more, you need a written acknowledgment from the charity. © 2021 CNET, A RED VENTURES COMPANY. The Covid / Coronavirus stimulus payments you received will NOT affect your tax refund. Or, if you were claimed as a dependent on someone else’s tax return in 2018 or 2019 but won’t be for 2020, you may be eligible for the credit. You should file your taxes early so you can avoid delays when waiting for your tax refund. For example, let's say your tax refund was $500 and your stimulus check allotment was $500. ... Returns as of 2/19/2021. April 15 is the filing deadline for your 2020 federal tax return -- unless the IRS decides to postpone the deadline. The 2021 tax filing season now is officially, although only partially, open. Save for retirement by maxing out your 2020 IRA. You'd receive a $1,000 payment from the US Treasury. If the IRS calculates your sum based on your 2019 life circumstances, you'd miss out on the rest of the check for a year or more, by the time it's processed. qualified for a check but didn't receive all the money, help you claim missing stimulus payment money, non-filers will also have to file a tax return, have to wait until 2022 to claim any additional stimulus money from a potential third check, you'd have to claim a year from now on your 2021 taxes, deposited directly into your bank account, Where's My Refund tool will reflect the status of your refund, this information about the child tax credit, how to calculate your adjusted gross income. Tax Season 2021 starts Feb. 12. The due date for first quarter 2021 estimated taxes is April 15, 2021. The IRS says its Where's My Refund tool will reflect the status of your refund within 24 hours of filing, which could include a confirmation that your refund has been issued. So, if you file on the first day, you might still be waiting until February 15 for your refund. The IRS is pushing back the beginning of the 2020 tax season to Feb. 12. The deadline: submit by April 30, 2021 You will need to have submitted your tax return forms by April 30 at the latest — set a reminder, put it in your calendar, tattoo this date into your brain if you have to. ALL RIGHTS RESERVED. If the tax credit is more than you owe, you'll receive the difference as a refund. I've written for Forbes since 1997. Opinions expressed by Forbes Contributors are their own. Watch out: “These gifts must be substantiated,” says Conrad Teitell, a tax lawyer at Cummings & Lockwood in Stamford, Connecticut. Benefit 1: The earlier you file your taxes, the sooner you'll get your tax refund (you can estimate the total here). Some people had problems with custody and child support or missing money for child dependents in general. If you're owed a tax refund and stimulus money, both will arrive as part of the same payment. The IRS is accepting 2020 tax returns starting February 12, 2021. The IRS also gives this recommendation. (If you received an EIP card, you can check the balance and transaction history here.) The due date for first-quarter 2021 estimated taxes is April 15, 2021. Others had funds accidentally garnished. Assuming seven days is the soonest you'd get your combined tax refund-stimulus payment and 21 days is the longest, we've sketched out what a difference filing sooner rather than later could make. If you’re eligible—and either didn’t receive a payment or think you qualify for more than you got—you can claim a Recovery Rebate Credit on your 2020 tax return. The deadline for filing taxes this year is still April 15, 2021. This is a little bit later than normal, as the agency usually opens the filing season at the end of January. Most taxpayers got two economic-impact payments in Round 1 and Round 2. (Here's what to do if you didn't get the IRS notice.). In other words, it'll be bigger. That's the latest start to tax season we've ever seen. That means that even if you, like most taxpayers, take the standard deduction and don’t itemize deductions, you can take the $300 charitable deduction. The normal deadline for tax filing and tax payment sticks in 2021 unless the CRA extends both deadlines again like last year. House Tax Committee Chides IRS About Slow Start To Tax Season, Urges Tax-Day Deadline Delay, IRS Delivers Covid-19 Surprise To Workers:  A Chance To Redo Their 2021 Health Plan And FSA Choices, Dollar Cost Averaging Vs. Benefit 3: The chance to set up direct deposit with the IRS or fix any errors. On the flip side, if you owe a lot at tax time, you might need to make estimated tax payments for 2021. The IRS received roughly 16 million paper individual returns last … Next, your tax returns play a big role in calculating the next round of stimulus check money. The possiblity of a third stimulus payment may give families who faced financial hardship in 2020 another reason to file their tax returns early. Alternatively, you can recontribute money back into a retirement account and undo the tax consequences of the distribution. 4 reasons to file your tax return as soon as possible, now that tax season is here. It's more frustrating for those taxpayers who, because of COVID-19 complications (which also created this year's filing delay), are really counting on their tax refunds to cover expenses. The CRA reminds taxpayers to gear up and prepare returns for 2020 taxes early. The money goes in pretax, grows tax free, and comes out tax free if you use it for eligible healthcare expenses. One out of five taxpayers don’t get their tax refunds by direct deposit. The IRS likely will begin accepting electronic returns … Check the IRS Where’s My Refund? And here's how to calculate your adjusted gross income. The deadline to file your return and pay your taxes is April 30, 2021. Once you have the amount you're owed worked out, you'll enter it on line 30 of either of those forms. Is the IRS extending the tax return deadline past April 15, 2021? Faster assessment Now's not the time to delay your tax return. Save for healthcare expenses, or retirement, by maxing out your HSA. This is the safest and easiest way to file an accurate tax return and get a refund,” says IRS Chief Taxpayer Experience Officer Ken Corbin. Personal Finance Insider named H&R Block the best tax software in 2021. Photo by Kay Bell The 2021 filing season won't start until Feb. 12 this year. But this year, the IRS won't start accepting 2020 tax returns until February 12, 2021. By Bethany Davis | January 22, 2021 at 6:18 AM CST - Updated January 22 at 9:18 AM A personalized refund date should show up 24 hours after you e-file. Plus, getting your taxes filed could be your ticket to finally receiving the first or second stimulus payment if you're one of the millions who qualified for a check but didn't receive all the money -- even if it was a clerical error or some other issue that caused your check to never arrive. This year, the IRS didn't begin processing tax returns until Feb. 12, making that the soonest you could have submitted your return (April 15 is the last day to file). And here's more information about stimulus checks and your 2020 taxes and when it's time to contact the IRS or set up a payment trace if your stimulus payment doesn't show up. Check out the new charitable deduction for 2020. If you're due a refund from the IRS, it'll include both your full refund amount and whatever you're owed from the Recovery Rebate Credit. There are a few solid reasons to file early. Stimulus payment true up. For those who are self-employed, or who have a spouse/partner who is self-employed, the deadline extends until June 15, 2021. On the flip side, if you owe a lot at tax time, you might need to make estimated tax payments for 2021. Though you can still technically file your taxes by mail and request a paper check, the fastest way to get the money you're owed is to file electronically and have funds deposited directly into your bank account. The 2021 tax filing season is on the horizon and kicks off on February 22, 2021. (If you're on the hook for taxes but you're owed stimulus check money, the amount you have to fork over will be reduced. For gifts under $250, credit card statements or cancelled checks will work as a receipt. The backlog for paper returns is large and likely to grow, so anyone. The good thing about filing your taxes early is that you don't have to pay your tax bill at the same time. The article "Tax Season Starts February 12: Why You Should File as Early as You Can" originally published on Grow+Acorns. UPDATE, Jan. 15, 11:20 a.m.: The full 2021 filing season will start on Feb. 12. Covid-19 related 401(k) distributions. tool. While we're almost there, that's still 16 days later than last year. Substantiation rules for cash gifts by itemizers also apply to nonitemizers. Normally, the filing period begins in late January, allowing early birds to submit their returns and get their refunds. Some Dutchies will be stressing to have this done by April 1, as then they can potentially get a refund by July 1. The deadline for filing your 2020 taxes is April 15, 2021. However, you may want to file sooner. If you’re expecting a refund and want to know when you might get it, the Where’s My Refund? Here's what to do if you're a non-filer, i.e. It did clarify that money purchase pension plans were eligible for the special rules. If you have self-employment income, make sure you keep track of deductible expenses relating to your gig, and if you’ve set up a home office, you might qualify for the home office deduction. That’s the day when the IRS will start accepting and processing 2020 taxes. Any money you don't get as part of the automatic payment you'd have to claim a year from now on your 2021 taxes. COVID-19 might be changing our taxes in 2021. Some states are providing tax relief for the state tax hit on unemployment benefits. About 8 million non-filers will also have to file a tax return this year to get their stimulus payment. If you take out money for non-healthcare needs, you’ll owe taxes—plus a 20% penalty if you’re under 65. If you have child dependents, this information about the child tax credit could help put more money in your pocket. The 2021 tax season is shaping up to be a confusing one, with an overwhelmed IRS trying to handle 2020 federal returns and stimulus payments. “Folks were disappointed that the Covid-related relief wasn’t extended for 2021,” says Lisa Loesel, an employee benefits lawyer with McDermott Will & Emery in Chicago. Follow me on Twitter: @ashleaebeling and contact me by email: ashleaebeling -- at -- gmail -- dot -- com, © 2021 Forbes Media LLC. If you no longer have that letter, you can use the IRS' Get My Payment tool to help figure out when you received the payment. If, however, you owe the IRS money, your Recovery Rebate Credit will be applied to the debt. Then fill out a new form W-4 withholding allowance certificate, and you’ll get more in each paycheck, instead of essentially loaning it to Uncle Sam. People with direct deposit accounts on file with the IRS have typically received their stimulus payments faster than those getting money in the mail. If you’re self-employed or have a spouse or a common-law partner who is self-employed, the deadline to file your taxes is June 15, 2021. (There's more below on how to calculate how much money you might get in addition to your tax refund.). And then there’s all the pandemic-related tax law changes to consider. There are many reasons why the IRS might still owe you stimulus check money, including: The IRS requires you to fill out either form 1040 or 1040-SR if you're going to claim a Recovery Rebate Credit on your 2020 taxes. Last year, as a result of the coronavirus epidemic, the IRS extended the deadline for filing tax returns to July 15, 2020. you won't be filing taxes for 2020, and you're still owed a stimulus check. This includes basic state benefits as well as the extra $600 weekly CARES Act federal pandemic benefits. Details to come shortly in a separate post. It'll also show you the last four digits of the bank account it was deposited in if it was deposited directly. 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