Well now that the 2020 holidays have passed and the 2021 new year ship has already set sail, everyone’s favorite time of year is approaching: Tax Time!

Wait, it is EVERYONE’S favorite time of year? Isn’t it?

Hmm, I getting a sense that tax time a/k/a tax season is not the most joyful period for a lot of you.

Um…

Well, I will bear the burden of letting you know that our beloved IRS has let us know that tax filing time is near.

The Internal Revenue Service (IRS) has announced that tax season will open on Friday, February 12, 2021. Yep, on a Friday.

The IRS will begin accepting paper and electronic tax returns on that date. This is about two weeks later than had been expected. The delay allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes – especially those involving a second round of stimulus checks (formally known as: Economic Impact Payments, or EIPs). BTW, I’ve answered a bunch of questions about the second round of stimulus payment in a prior post which you can find here.

Richard Neal the House Ways and Means Committee Chairman said, about the date, “While I am disappointed that this year’s filing season will begin later than usual, I recognize that the IRS has faced extraordinary challenges throughout the COVID crisis. It’s a relief to know that despite contending with the distribution of two rounds of economic impact payments, facility closures, and other disruptions, the agency will be able to begin accepting returns within the next month. It is also encouraging that the IRS expects taxpayers who file electronically at the beginning of the season and claim refundable tax credits to receive their refunds by the first week of March. I urge taxpayers to complete their returns and file electronically as early as possible.”

The IRS also had a comment. “Planning for the nation’s filing season process is a massive undertaking, and IRS teams have been working non-stop to prepare for this as well as delivering Economic Impact Payments in record time,” according to IRS Commissioner Charles Rettig. “Given the pandemic, this is one of the nation’s most important filing seasons ever. This start date will ensure that people get their needed tax refunds quickly while also making sure they receive any remaining stimulus payments they are eligible for as quickly as possible.”

Last year’s average tax refund was more than $2,500. More than 150 million tax returns are expected to be filed this year, with the vast majority before the Thursday, April 15 deadline. While there has been talk about an extension, so far, it is just that. TALK. According to the IRS, the tax return deadline remains April 15, 2021.

The delayed start date may ease the waiting game for some taxpayers. But something to keep in mind is that the law now requires the IRS to hold refunds tied to the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until February 15 – that’s just a few days after the season opens. In addition, this rule which bars IRS from issuing refunds for taxpayers claiming the Earned Income Tax Credit or the Additional Child Tax Credit before mid-February applies to the entire refund. Even the portion that is not associated with the EITC and ACTC. So plan accordingly.

The IRS still anticipates issuing more than nine out of 10 refunds in less than 21 days. You can check out Where’s My Refund? at IRS.gov or the IRS2Go phone app for projected deposit dates.

But, in closing, if you have all of your tax documents ready before February 12 you can still make an appointment with Solid Tax Solutions (SolidTaxSolutions.com) to have your taxes prepared before that date. This way you will beat the rush and be done and we will e-file your tax return early on February 12.

To schedule your appointment just call us at: (845) 344-1040.

AS ALWAYS: PLEASE, PLEASE, PLEASE STAY WELL and STAY HEALTHY!

BRUCE

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Bruce – Your Host at The Tax Nook

Our Firm’s Website: SolidTaxSolutions.com