LOUISVILLE, Ky. — The pandemic has complicated just about everything - including our taxes. The IRS will begin accepting federal tax returns for 2020 on Feb. 12, 2021 - a few weeks later than usual.
As you prepare to file your 2020 taxes, keep in mind that unemployment, stimulus payments and even working from home can all have an impact on how much money you get back this year.
How do unemployment, stimulus payments affect my taxes?
Unemployment
Many people lost their jobs temporarily - or permanently - during the pandemic. If you received unemployment benefits, you will need to report those on your 2020 taxes.
The IRS requires people to report income received in the form of unemployment. In fact, failure to do so could result in taxes owed to the IRS and if you don't pay those, you could end up with extra penalties and interest.
Pandemic Relief Payments
Neither of the stimulus payments that were issued in 2020 are taxable since they are considered tax credits, not income. According to the IRS, you won't have to report these on your taxes.
Tips for the tax filing process
Get Organized
Good organization may not give you a break on your taxes, but there are other rewards. The IRS and companies like TurboTax offer checklists that you can print out so you don't miss any forms.
This is the time of year when you're likely to receive the tax forms you need to file like your W-2 and Form 1099. Be careful not to throw away any tax documents you receive in the mail, even if they don't look very important.
File Online
The IRS expects about 90% of people to file their tax returns electronically. Filing electronically and choosing direct deposit is the fastest and safest way to file an accurate income tax return and receive a refund.
Most refunds are issued in fewer than 21 days, but some tax returns require additional review and may take longer to process. This may be necessary when a return has errors, is incomplete or is affected by identity theft or fraud.
The deadline to file your tax return and pay any taxes owed is Thursday, April 15. At this time, it doesn't look like that deadline will be extended or changed due to the ongoing pandemic.
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