You can’t talk about 2020 without bringing up the pandemic and its effect on businesses and the post office.
Many individuals waited months and months on their 2019 taxes to process, even with certified, tracked mail that went to Utah and stayed there with no movement or acknowledgment of receipt.
Some saw their returns late or otherwise passed over. To put it lightly, it was a mess. We can anticipate a better process this year, but only time will tell.
With the tax season coming up and employees already receiving their 1099s, it’s time to look at what your online process will look like this year. As you might recall, the deadline last year for filing taxes was bumped from April to July 15th, but this year will be the typical date: April 15th, 2021.
First off, if you received one, your stimulus check is not taxable income. It was given to taxpayers as an advance credit towards 2020’s taxes. It will not reduce a taxpayer’s refund nor will it increase the amount of tax a taxpayer owes when they file, per the irs.gov official site.
Additionally, if you are thought you would be able to deduct home office costs due to working from home caused by the pandemic, you’re unable to do so because of the TCJA (Tax Cuts and Jobs Act).
Self-employed individuals can still utilize these deductions, but anyone forced to work at home remotely is going to miss out. This act is in effect until 2025.
Many people turn to CPAs or other tax handlers for solutions to their financial woes, but the IRS has actually made it easier than ever in the past few years to do it all yourself. If your annual gross income rolls in at $72,000 or under, you can actually file for free online using the IRS Free File system.
Within Free File, you will come across a bunch of third-party filing options that are, as suggested, entirely free. Some may be part of the solution you are already using, such as TurboTax. Be sure to check out what you are getting yourself into before diving in, however, as some filing companies have been known to hide or reduce the visibility of their free options in the past.
If your income exceeded $72,000, you can still use forms on Free File, but won’t have access to software solutions. These self-filing forms will be available on January 25th, and the IRS still hosts plenty of information on how to file yourself.
Paying online is also an option if you choose to take things online this year. Not only does it allow ease of use, but supposedly you can also get your refund faster this way, often in less than 20 days. Check out their site for more information about paying online.
Whatever you choose to utilize, make sure you are comfortable and confident before submitting your taxes.
With the economic hardship most of us faced last year, it can be depressing to even conduct such an evaluation, but use the tools at your disposal to benefit those affected by COVID-19 and perhaps start a new tradition of taking the filing of your taxes into your own hands this year.