The unprecedented events of 2020 changed lives as we know them. Many of the changes and shocks of the past year have led to changes in your tax return. Due to the COVID-19 crisis, you need to know many new and revised rules and important dates before filing your 2020 tax return. The publication has collected some of CNN’s most important.
When to file your 2020 tax return
The IRS will begin accepting federal tax returns on Friday, February 12th.
Yes, later than usual.
Typically, the tax season begins in the second half of January. But the IRS took more time to program and test its systems to make sure they were ready for the tax system, as the agency was bustling in late 2020.
When to pay taxes
Although the application period is later than the start date, if you do not apply for an extension, you will traditionally have to file and pay federal income tax for the remaining 15 years by April 2020.
This way, you avoid late submissions or late payment penalties.
If you miss the deadline to apply or pay, you may be entitled to waive the fine.
Can I apply for an extension?
Yes. You can automatically extend your 2020 federal income tax return by six months – which means you have to file your tax return by October 15th. To do this, send a request to the IRS by April 15th.
But please, the update is not an extension to pay off your debt. To avoid a late payment penalty, you must pay the remaining federal taxes on your 2020 income by April 15th.
And if you are eligible for a refund, a documented delay means you will have to wait longer to get your money back.
When to wait for the return
Refunds are usually made within 21 days of receiving your tax return. But the agency says the quickest way to get your money back is to file this return electronically and choose to transfer it directly.
Check the IRS tool for a better estimate of when you will receive your return, “Where is my return?” or within 24 hours after the agency says you received the electronic declaration or four weeks after you mailed it.
Is quarantine financial assistance taxable?
No. Money is not taxed.
But some people who were eligible for financial assistance did not get it. First, those whose income in 2019 is higher than their income in 2020 or those who have not filed their 2019 or 2018 tax returns. If they claim a repayable loan, they can collect their money on federal tax returns.
This loan will reduce your income tax liability from dollar to dollar. And if the amount of debt exceeds the tax liability, the balance will be refunded to you.
Are unemployment benefits taxable?
Yes. Unemployment benefits are considered taxable income by the IRS and most states (Alabama, Alaska, California, Florida, Montana, Nevada, New Hampshire, New Jersey, Pennsylvania, South Dakota, Tennessee, Texas, Virginia, Washington, and Except Wyoming).
If you have not withheld income tax from your unemployment benefit for the year, the total amount of tax will be calculated when you file your tax return.