Tax Savings

When Does Tax Season Start?

The U.S. Internal Revenue Service (IRS) began accepting returns for 2020 on February 12. This date was chosen so that the agency had time to prepare for the paperwork for new payments of financial assistance. The deadline for submission of documents remains the same – April 15.

Tax Season

The IRS is extending the tax season for Texas residents due to winter storms. Instead of April 15, the deadline for paying taxes for individuals and businesses in the state of Texas is June 15, as the IRS said in a press release dated Monday, February 22.

Check if you received income documents

In January or February, you should have received forms showing how much income you earned from your employers and received from other sources. If you work full-time, you must have a W-2 form detailing your earnings and taxes. If you are a freelance or contract worker, you may have a 1099-MISC detailing what you earned. You can also get documents showing dividends or interest earned on investments (for example, Form 1099-DIV or 1099-INT), or student loan interest (Form 1098-E).

If you are a college student (or you have a dependent student), then you receive a Form 1098-T that tells you how much you paid for your tuition and the amounts you received from grants or scholarships to help you calculate deductions and credits. associated with education costs.

How to file your tax return

There are several options for preparing and filing a tax return. Learn about each to make the right choice:

Free File: If your adjusted gross income (your income minus certain taxes) is less than a certain limit, the IRS offers free tax preparation software that can simplify the preparation of your documents, with features to help you identify any deductions or credits you may have would use.

IRS Online Forms: If your adjusted gross income exceeds the limit, the IRS offers electronic paper forms to help you calculate, but they only offer basic guidance and will not help you in determining which deductions or loans you could use.

Tax preparation software: If you want more detailed instructions, you can pay a commission to use the online tools available from several vendors. They will tell you how to prepare your tax return and help you determine any deductions or credits you are eligible for.

Professional Help: If you realize you need expert personalized help, contact a tax preparation firm or accountant. Make sure you are working with someone you can trust. You will be giving this person access to a lot of sensitive personal information, so choose a tax professional carefully. The IRS offers a directory of trusted tax experts in your area. While this does not guarantee their integrity, it is a good place to start.

Tip: Remember that you may need to prepare and file a state or local tax return in addition to your federal tax return.

What in your tax return may alert the IRS

This tax season can be challenging. Experts say that in addition to figuring out how coronavirus financial aid may affect tax refunds, more taxpayers will make mistakes and receive audit notices from the IRS.

Here are some general points that may prompt the IRS to take a closer look at your 2020 tax return.

  • Unreported income
  • Charitable contributions
  • Business expenses
  • High rental costs
  • Earned Income Tax Credit

9 costly mistakes to avoid

Tax season is in full swing. And if you are tempted to rush to filing your return, be careful not to make careless mistakes, or you may miss out on a large refund, owe more taxes, or face an IRS audit.

If you are expecting a refund but your basic personal information does not match, the IRS may notify you by mail within a minimum of four to six weeks that you must correct your mistake. Therefore, pay attention to the most common ones:

  1. Tax incentives are not taken into account
  2. Late submission
  3. The presence of tax fraud
  4. Invalid bank account numbers
  5. Change of name or wrong address
  6. Unsigned forms
  7. Incorrect registration status
  8. Lack of a report on all your income
  9. Mathematical errors.

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