Jobs

IRS now accepting tax returns. What’s different this tax season

Read more at www.thedenverchannel.com

The IRS began accepting 2020 tax returns on Friday, and it’s encouraging the public to file early if hoping for a prompt refund.

In addition, the IRS said it is emphasizing that taxpayers should use e-file to avoid paper-related processing delays.

Those earning up to $72,000 a year can use e-file for free by clicking here.

Because of the pandemic, and some related alterations to the tax code, there are some changes the IRS noted for those filing their returns for 2020.

“The pandemic has created a variety of tax law changes and has created some unique circumstances for this filing season,” said IRS Commissioner Chuck Rettig. “To avoid issues, the IRS urges taxpayers to take some simple steps to help ensure they get their refund as quickly as possible, starting with filing electronically and using direct deposit.

Here are a few items the IRS noted:

Recovery Rebate Credit helps people still eligible for Economic Impact Payments

The IRS said most people have received their stimulus checks that were issued last year, but those who didn’t receive a payment, or only received a partial payment, may be eligible to claim the Recovery Rebate Credit when they file their 2020 tax return.

New language preferences to help taxpayers

The IRS said that Forms 1040 and 1040-SR are available in Spanish for the first time, and the IRS has a new form allowing taxpayers to request that they receive information from the IRS in their preferred language.

Early retirement penalties dropped

Generally, the IRS charges a 10% penalty for dipping into retirement funds before age 59.5. The IRS said under the CARES Act, those distributions – up to $100,000 – are not subject to the 10% additional tax that otherwise generally applies to distributions. There are some requirements in order to have the penalty waived.

The IRS added a coronavirus-related distribution can be included in income in equal installments over a three-year period, and an individual has three years to repay a coronavirus-related distribution to a plan or IRA and undo the tax consequences of the distribution.

Small charitable donations can be deducted

The IRS is allowing individuals who generally take the standardized deduction to add up to $300 in charitable contributions to the deduction. For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific or literary in purpose.

Taxpayers have until April 15 to file their taxes or an extension

Read more at www.thedenverchannel.com

Show More

Related Articles

Back to top button