Tax season is approaching quickly. Are you ready? With the pandemic, a delayed tax season from last year, and stimulus payments, IRS employees are dealing with a lot. There has never been a better time to file early and electronically, if possible. E-filing is more efficient and faster than mailing in your taxes. You can even get your refund faster by choosing direct deposit.
How COVID-19 is Delaying the IRS
In fact, COVID-19 has caused many delays, which means that processing time for paper returns, returning calls, and reviewing electronic tax returns has slowed dramatically. The IRS will also be dealing with people in need of stimulus relief that was authorized again in December 2020. These payments are based on your 2018 and 2019 returns, so if income has decreased or stopped, you may be able to claim the “Recovery Rebate Credit” on the 1040 form for 2020.
Keep in mind that the stimulus payments will not be sent via direct deposit, even if this is how you received the payment last time. The IRS is issuing stimulus payments on a prepaid debit card issued by MetaBank. MetaBank is the Treasury’s financial agent. Some people are still waiting for their 2019 tax refunds.
- Unemployment benefits are taxable income. You may have opted against having taxes taken out. So, if you received unemployment benefits, keep an eye out for the IRS Form 1099-G.
- The Cares Act provision allows people to take money out of their retirement funds and spread the taxes owed over three years. This could result in large bills if funds aren’t held back to cover the taxes.
Change to Coronavirus Aid, Relief, and Economic Security (Cares) Act:
- Now, couples who filed jointly can claim the rebate credit on their 2020 return, even if only one of the spouses had a Social Security number.
Protect Yourself from Scammers:
IRS scammers will use a variety of methods to contact you. You may be contacted through regular mail, telephone calls, emails, or even text messages. Keep in mind that the IRS will not contact you via text messaging or initiate contact with you by email or social media. According to the Treasury Inspector General for Tax Administration, the IRS generally contacts people by mail about unpaid taxes. We recommend that you review the types of known IRS scams at the Treasury website.
If you are concerned that a communication you received is not real, contact the Treasury Inspector General for Tax Administration at www.tigta.gov. If the communication is an email, delete or forward the scam email to [email protected].
Need More Information?
Our office has also posted about How to Avoid Common Tax Errors and how to protect your identity. At the Law Office of Daniela Romero, we believe in relationships that are based on trust. Before we work together, we would like you to get to know us. This will allow you to be completely comfortable sharing intimate and difficult details of your case, so we can offer you representation to the fullest extent of the law. Call us today to set up a free consultation.