January usually brings a busy tax prep season for people who want to file right away, but this year, the first day to file has been pushed back to February 12th as the IRS incorporates some of the changes congress passed in late December. There are several other pandemic considerations everyone should be aware of for this year’s taxes.
The two stimulus payments many Americans received in 2020 are being administered by the IRS, which means any issues can be resolved with your tax return.
“If you have not received your stimulus check yet, give it until February 1st, after that you can apply and you should be able to get the rest of your stimulus payment on your 2020 tax return,” Timothy Ness, the owner of Ness Tax and Bookkeeping said.
New parents will not only be able to claim a new dependent this tax season, but can also receive additional stimulus money.
“The rebates were granted on 2018 or 2019 information, so if you had a child in 2020, that additional stimulus will be able to be claimed on your 2020 tax return,” Ness said.
Another big difference many families will see this tax season is a period of furlough or unemployment during the pandemic; if you received benefits from the state, you’ll still have to file them with your taxes.
“The unemployment benefits are taxable and you will get a form from the unemployment agency, a 1099-G, that will show you the total amount of taxable benefits you received,” Ness said.
If you were affected by COVID this year and had to take money out of your retirement plan, you have up to three years to pay that tax and there is no penalty for taking it out early.
If you were working from home this year, you won’t be able to write off that new home office as a work expense on your taxes, only self-employed people can make those deductions.
But no matter how complicated your tax return gets this year, the best place for everyone to file is online.
“The internal revenue service has suggested that everybody file electronically this year because they are still processing paper returns from last year,” Ness said. “They have close to six million paper returns from last year that have not been fully processed.”
Mail-in filers could face a long wait for any refunds or unpaid stimulus money. If you’re concerned about the safety of filing online, the IRS has a new pin number program to help prevent identity theft this tax season.