The 2020 tax returns are due on May 17th with the IRS. Here are some last minute filing tips
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Individuals have just a few days left to file their 2020 tax returns without risking a penalty from the IRS.
This year the deadline for tax returns is Monday May 17th. In March, the IRS postponed the date on individual returns due to the coronavirus pandemic, giving most taxpayers an extra month to file tax returns.
Still, many Americans hesitate when it comes to preparing and filing their taxes – even with extra time. This year filing has been made difficult by the ongoing coronavirus pandemic and legislation passed midway through this year’s filing season.
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If you haven’t already done your taxes, don’t worry, said Mark Steber, chief tax information officer at Jackson Hewitt Tax Services.
“There is still a lot of time to prepare your taxes accurately and correctly,” he said. “So don’t panic.”
Even so, he recommends at least devising a plan to be submitted before the deadline so that you don’t get caught off guard at the last minute.
“Speed and panic can lead to mistakes,” he said.
Just do it
In some ways, it has never been easier thanks to several online programs that people can use to prepare and submit their returns.
“You still have time to collect your papers and records before the deadline,” said Lisa Greene-Lewis, CPA and Tax Specialist at TurboTax.
To ensure your return preparation and filing goes smoothly, she recommends collecting all income statements, exact Social Security numbers for you and all loved ones, correct banking information, and receipts for donations or items for deduction.
Greene-Lewis also recommends filing online and choosing a direct deposit for a refund. This is the fastest way to submit your information and get your money back from the IRS.
If you need help or aren’t sure you’ve completed your tax return correctly yourself, it’s still possible to find a tax advisor shortly before the deadline, said Steber of Jackson Hewitt Tax Services – just because it’s late in the season does not automatically mean that you have to pay your taxes yourself.
“There’s tons of help out there to help,” he said, adding that people should still feel like they can reach out to industry professionals, make appointments, or even go to places that offer drop-in services .
“Tax industry players big and small live for this kind of deadline and we’re helping people now and after,” he said.
If you are expecting a refund
One of the top reasons for filing a tax return is to request a refund that you owe. As of May 7, the IRS has received more than 126 million individual tax returns and processed more than 115 million. To date, the agency has sent nearly 85 million tax refunds to Americans with an average check of $ 2,863.
Often the greatest coincidence families receive year-round, this refund can be helpful in paying off debts, increasing savings, and much more. This year in particular, following the effects of the coronavirus pandemic, Americans should be demanding any money they owe.
There’s no shame in filing for an extension.
Associate Professor at the McDonough School of Business at Georgetown University
According to Rebecca Thompson, director of the Taxpayer Opportunity Network at Prosperity Now, a nonprofit, a refund isn’t free money. It’s money you overpaid to the US government, basically an interest-free loan. You have the right to get it back and you should.
While May 17th is the deadline for this year’s taxes, this is also the date by which you must claim refunds from 2017 onwards. Taxpayers have three years to apply for refunds with the IRS. In April, the IRS announced that they had unclaimed refunds of $ 1.3 billion as of 2017.
“Unless [file] then that money is lost and it becomes a donation to the Treasury Department, “Thompson said.
Lots of credits to claim
This year there are other reasons submitting information to the IRS is important, even for those who traditionally do not file.
For one, filing a return and claiming the refund discount credit is the only way you can get any economic impact payment owed, or get a “top-up” amount if your circumstances change – for example, if you had a baby in 2020, the one for one Stimulus check came into question.
The American bailout plan also made some tax changes. For the millions of Americans who lost their jobs due to Covid, the first $ 10,200 in unemployment benefits is now exempt from federal taxes for those on incomes below $ 150,000. The exemption is $ 20,400 for a couple with the same income.
Parents are also required to file a 2020 tax return to ensure the IRS has accurate information to apply for the extended tax credit for children whose monthly payments are scheduled to start in July.
If you don’t file, you may owe more money
If you don’t file, you could miss out on the refund money and potentially receive penalties and interest if you owe the IRS.
“Anyone who thinks they owe something is very important to ensure that they receive that tax return or file an extension that is accepted by the IRS and that they do so by the filing deadline,” Thompson said. “If not, they will face penalties for failing to submit and not pay.”
Of course, it is possible to file an extension by submitting Form 4868. This means you have until October 15th to file your taxes.
“There’s no shame in filing an extension,” said Allison Koester, former CPA and associate professor at Georgetown University’s McDonough School of Business.
But that doesn’t mean you are off the hook if you owe the IRS something – the payment deadline is May 17th, regardless of whether you filed an extension or not. Typically, to avoid a penalty, you must pay at least 90% of your debt to the IRS by the May due date.
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