Tax season is here! The IRS announced that it will begin accepting and processing 2020 federal tax returns on February 12th, 2021. This means you have some time to get together all your tax documents and take the time to prepare your 2020 federal return.
If you already have all your paperwork together and have your tax return prepared and ready to file, you can begin filling your returns with certain tax prep software, including IRS Free File. Most of these software programs will accept any completed tax returns and hold them until the IRS begins processing federal tax returns on February 12th. If you are wanting to get your tax return filed quickly and receive your tax refund quickly, the best thing to do is to file your return electronically.
When filing your 2020 return, there are certain things you should keep in mind! One is you will need to see if you are eligible for the recovery rebate credit. If you were eligible for the stimulus payments but did not receive them, you might be eligible for the recovery rebate credit. Most tax preparation software including IRS Free File will help you figure out the amount of credit you are due. If you did receive both Economic Impact Payments, you do not need to do anything on your federal tax return.
If you don’t think you will have your tax return ready by February 12th, it’s okay! You have until April 15th to file your federal return. If you don’t think you will have it ready by then, you can file for an extension and will have until October 15th to file your return. If you don’t file either your federal return or file for an extension by April 15th, your tax return will be considered late. It is important to remember that when you file for an extension, it only gives you an extension to file your federal tax return. You need to pay your federal taxes by April 15th, or you will start accruing penalties and interest on your tax debt.