Although tax season usually starts in late January, this year, the tax filing season is delayed until February 12, 2021. The delayed start date for individual tax return filers allowed the IRS time to do additional programming and testing of IRS systems following the December 27, 2020, tax law changes that provided a second round of Economic Impact Payments and other benefits to many taxpayers. This programming work is critical to ensuring IRS systems run smoothly to minimize refund delays and ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return.
File Electronically for Faster Refunds
Last year’s average tax refund was more than $2,500. Once again, the IRS anticipates that nine out of 10 taxpayers will receive their refund within 21 days when filing electronically with direct deposit – and there are no issues with their tax return.
More than 150 million tax returns are expected to be filed this year – the majority before the Thursday, April 15 deadline. To speed refunds during the pandemic, the IRS urges taxpayers to file electronically with direct deposit as soon as they have the information they need. To avoid delays in processing, people should avoid filing paper returns wherever possible.
Taxpayers eligible for IRS Free File were able to begin submitting tax returns on January 15, 2021, although the returns will not be transmitted to the IRS until February 12, 2021.
Reminders
Under the PATH Act, the IRS cannot issue a refund involving the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law provides this additional time to help the IRS stop fraudulent refunds and claims from being issued, including to identity thieves.
The IRS anticipates a first week of March refund for many EITC and ACTC taxpayers if they file electronically with direct deposit and there are no issues with their tax returns. This would be the same experience for taxpayers if the filing season opened in late January. Taxpayers will need to check Where’s My Refund for their personalized refund date.
Key Dates for Taxpayers Filing a Return
Important dates that taxpayers should keep in mind for this year’s filing season include:
January 2021
February 2021
March 2021
April 2021
October 2021
Help is Just a Phone Call Away
Taxes are more complicated than ever. If you have any questions or concerns regarding tax filing this year, don’t hesitate to contact the office.
Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, we would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.