Tax season 2021: key dates and IRS recommendations

The Internal Revenue Service (IRS) announced on its the official website that the tax season in the country will begin on February 12, 2021, when the agency will begin accepting and processing returns for the 2020 tax year.

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The season start date for individual tax fillers gives the IRS time for additional programming and testing of systems following the December 27 tax change that brought a second round of coronavirus financial aid and other updates.

This testing is critical to ensure the smooth operation of the IRS systems, the agency's website says. If the application season were open without these changes, there might be a delay in tax refunds. The changes will also ensure that eligible people will receive any remaining financial aid payments as Recovery Rebate Credit upon filing their 2020 tax return.

To expedite refunds during a pandemic, the IRS is urging taxpayers to file electronic returns with direct deposit as soon as they receive the information they need. It is already possible to file tax returns with tax software companies, including IRS Free File partners. These teams will begin accepting tax returns and submitting them to the IRS on February 12th.

Last year, the average tax refund was more than $2500. More than 150 million tax returns are expected to be filed this year, the vast majority of them by the April 15 deadline.

In accordance with the law, the PATH IRS cannot make refunds, including the Earned Income Tax Credit (EITC) or Supplemental Child Tax Credit (ACTC), until mid-February. The law provides this additional time to help the IRS prevent fraudulent returns and claims, including from those who have stolen other people's personal information.

On the subject: Some US residents will not automatically receive new financial aid: what to do

The IRS is expected to begin a refund process in the first week of March for many EITC and ACTC taxpayers, as long as they file an electronic direct deposit return and have no problem with their tax returns. To find out the individual return date, you will need to check its status using the Where's My Refund tool.

Overall, the IRS expects 9 out of 10 taxpayers to receive a refund within 21 days of filing a direct deposit e-return, assuming there is no problem with their tax return. The IRS encourages taxpayers and tax professionals to submit documents electronically. To avoid processing delays, paper submissions should be avoided whenever possible.

IRS Taxpayer Tips

To speed up refunds and make filing your tax return easier, the IRS recommends the following steps:

• Submit your return electronically and use the direct deposit for a prompt return.
• Visit IRS.gov for the latest tax information, including information on financial aid for the coronavirus. No need to call.
• Those who are eligible for financial assistance should carefully read the guidelines for returning a bonus loan for Recovery Rebate Credit. Most people received financial aid automatically, and those who received the maximum amount do not need to provide information about their payments when filing a tax return. But those who have not received part or all of their payment may require a Recovery Rebate Credit when filing their 2020 tax return. Tax preparation software including IRS Free File will help you calculate the amount.
• Remember that advance payments for financial assistance received separately are not taxed and do not reduce the amount of the taxpayer's refund after filing a tax return in 2021.

Key filing dates

Taxpayers should be aware of several important dates this year:

• 15 in January. The free IRS Free File tax filing system opens. Taxpayers can start filing returns through Free File partners; Tax returns will be sent to the IRS starting February 12th. Tax software companies also accept documents in advance.
• 29 in January. Earned Income Tax Awareness Day, available to many people and including the ability to use previous year's income to qualify for the benefit.
• 12 February. The IRS kicks off the 2021 tax season. The reception of individual tax returns opens and their processing begins.
• 22 February. Planned update date for IRS.gov Where's My Refund for EITC and ACTC applicants.
• First week of March. Tax refunds are starting to come to those who request EITC and ACTC (PATH returns) for those who file electronically with direct deposit and have no problem with their tax returns.
• 15 April. 2020 Tax Return Deadline.
• 15 October. Deadline for applications to extend the 2020 tax filing deadline.

Opening season

The IRS must ensure that systems are ready to properly process and review tax returns to ensure that the correct amount is credited to taxpayer accounts and to provide the remaining funds to eligible taxpayers. Therefore, the date is set for February.

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Although tax seasons often start at the end of January, there have been five cases since 2007 where filing seasons for some taxpayers did not open until February due to changes in tax laws made just before the start of the tax period.

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