01 Feb Tax Season Is Here. Here’s How to Prepare
By Richard Tzul
Tax season has arrived, that annual ritual many people dread. But it turns out, filers can possibly get more out of their returns than they expected thanks to a credit’s eligibility being expanded.
The Internal Revenue Service has provided resources and advice that can smoothen the process and help filers get more from the government. That includes free filing guidance for lower-income folks, flexible payment options and assistance from volunteers.
People have until April 18 to file their returns. To make the process quicker and more seamless, people should file electronically and make sure their information is accurate, said Kenneth Corbin, the newly appointed chief taxpayer experience officer of the IRS. He also suggested people opt to receive their refunds via direct deposit. Paper checks are an option but take longer. Refunds are expected to trickle in starting early March.
“Filing tax returns should not be stressful,” he said during an IRS and Ethnic Media Services briefing Friday.
Corbin encouraged filing online because other options can be more time-consuming. He said the IRS has received 100 million calls with a staff of 15,000 personnel answering the phones, though he did not specify in what period those calls occurred. He said phone services are primarily meant for those who are not filing online.
Relief and Credits
Forty percent of those who qualify for the Earned Income Tax Credit are unaware of their eligibility, said Corbin, who is also the IRS wage and investment commissioner. The credit can be up to $1,502 for those without dependents. Workers who earned less than $57,414 and made less than $10,000 off investments are eligible. Eligibility has been expanded to include people who are at least 19 years old, though some students below the age of 24 may be excluded. This exception does not apply to some former foster youth or homeless youth. IRS.gov features a tool to help determine your eligibility.
Parents who received the expanded Child Tax Credit payments last year will get the remainder of the money owed to them in the form of a refund. Those who did not get the credit despite being eligible can still get those funds by claiming the credit.
The IRS will send letters to those who received credits to verify the amount received. If the amount listed in the letter is incorrect, put the correct information in the return. What will follow is a confirmation procedure that Corbin noted may lengthen the process.
People with an adjusted gross income of $73,000 or below can file their federal taxes for free thanks to the IRS Free File Program. The program offers free online guided tax preparation with partnering businesses. Different partners have different eligibility requirements, and some offer free state tax filing as well.
People of any income level can fill out forms on the website available for free; however, filing does come at a cost in this instance. While the Free File Program offers some filing guidance, these forms provide no counsel.
Those seeking help have other options from the IRS whether dealing with language or financial barriers.
Those who owe taxes but cannot pay the full amount at once may request an installment agreement to pay in increments. So long as a filer enters an agreement, they may be allowed to continue paying after the April 18 deadline without facing fees or penalties.
People can also arrange payments in advance for April 18 or before. Once a payment is scheduled, filers can adjust the amount or cancel up to 48 hours before withdrawal.
Filing assistance is also available on the IRS2Go app.
Those who want help from another person can use the Volunteer Income Tax Assistance program. Volunteers can guide low-to middle-income people through their filings in person or over the phone. To find a volunteer nearby, check the IRS’s website or the app.
Other tips and things to be aware of
Corbin warned against scams such as telephone calls asking for banking information or payment requests for gift cards.
“Let me assure you, the IRS will not call you on your phone without sending you a notice or let you know in advance to expect a call from the IRS,” said Corbin. “So don’t accept a text message. Don’t accept a phone call.”
When online, people should ensure they have a secure connection and are on the legitimate IRS website, which ends with “.gov,” not “.com” or any other domain.
Those whose 2020 tax returns have still not been processed must still file for 2021 and should put $0 on adjusted gross income for 2020.
Unlike last tax season, there is no extension to the filing deadline this year, though it is slightly different from the usual April 15 marker. As mentioned earlier, taxpayers have until April 18 to file their returns.