When Can You Start Filing Taxes 2021

Posted by Rushell Kayna on February 16th, 2021

On IRS taxes 2021, the Internal Revenue Service announced that the country's tax season would begin on Friday, February 12, 2021, when the tax agency begins accepting and processing the 2020 tax year returns.

The February 12 start date for those filing personal tax returns allows the IRS to perform additional programming and testing of the IRS system following the December 27 tax law changes. The law changes will provide a second round of economic impact payments and other benefits.

When Can I File Tax In The Year 2021?

You can e-file (electronically) your taxes earlier, even though taxes are payable by April 15, 2021, for most taxpayers. The IRS prospect will begin accepting electronic returns somewhere between January 15 and February 1, 2021, when taxpayers should have received their final payroll for the 2020 fiscal year. The IRS will announce on its website when you can file. (February 12 is the date as the beginning of the tax season).

When Are Taxes Due?

For the 2020 tax year, the time to file individual and corporate tax returns is by April 15, 2021. However, there has been no change in the filing date for the 2020 fiscal year.

You can request an extension by October 15, 2021, if you cannot file your return on time. However, you will still have to pay your taxes according to your original time frame. If you do not comply, you may be on the net for penalties and interest.

In current practice, the Internal Revenue Service (IRS) encourages taxpayers to prepare early by checking their withholdings, collecting tax documents such as their 2019 tax returns and W-2s, and verifying their contact information with their employers and banks. You should also receive Form 1099-G if you received unemployment benefits during the 2020 fiscal year. 

Will a Stimulus Check Affect Tax Returns?

Suppose you received an Economic Impact Payment (EIP) in 2020 (also known as an incentive payment) as part of the Coronavirus AIDS, Relief and Economic Security Act (CARES Act). In that case, it may affect tax returns for the 2020 tax year. These incentive payments or stimulus packages were advance payments of tax credits refundable for personal tax returns of the year 2020.

This payment is made on your 2020 return, even if the advance payment was based on your 2019 or 2018 tax return. You can still get credit when you file for 2020 even if you did not qualify based on your 2019 or 2018 federal adjusted gross income. 

The IRS has further stated that the incentive payment is not included in your gross income, which means that you will not be taxed on it. It will not affect your federal tax refund or the amount you owe.

Also, while the stimulus or incentive payment is based on your 2018 or 2019 tax return, so far, no provision will require you to refund the EIP if your tax status changes in the 2020 financial year.

Who Is Eligible To File Taxes?

Your age, income level, and filing status will determine your taxes to file. While most people have to file taxes, there are some exceptions as far as the income level is concerned. For instance, if you are 40 years old, unmarried, and have earned a total of $ 5,000 in the previous tax year, you do not have to file for taxes.

How Long Does It Take For Tax Returns?

Individual tax returns are much less complicated than those of large corporations, for the most part.

According to the IRS, non-business tax returns take an average of seven hours. It includes record-keeping, tax planning, and form filling and submission. The average federal return will take anywhere from four to six hours to complete. However, tax preparation for more complex returns can take weeks. 

If you join hands with a professional tax preparer to help you through the process and pay a fee, it can only take a few hours to complete a personal tax return. Complex business tax returns can take 20 hours or more. If you find a reputable service provider, tax day becomes more comfortable.

Are There Penalties For Late Filing? 

1) IRS will charge interest on any tax which you do not pay by the due date.

2) Late filing penalty is 5% of the tax levied after the due date. The penalty is capped at 25% of the tax due. 

3) If you pay your taxes late, the penalty is usually 5% of unpaid tax paid—the fine may go up to 25%.

To Wrap It Up

The best way is to hire the professional services of a reputable firm for all your tax concerns. Connect with Just Call Jack and sail through the IRS rules with their expertise.