We know that 2020 has been an unpredictable year with several challenges so let’s get your federal tax refund faster! To help you better the IRS shared important reminders for taxpayers who are about to file their 2020 federal tax returns. Review these few ways so that you too can get your refund faster.
- File ASAP! as soon as possible; you’ll get your money sooner, of course, but it might also lower the odds of criminals taking your refund. Tax refund theft typically starts when someone steals personal information, then uses it to file fake tax returns and pocket the refunds.
- Choose direct deposit – it is safe, accurate, and fast. Did you know that 8 out of 10 taxpayers get their refunds by using direct deposit already?
- Earned Income Tax Credit – The Earned Income Tax Credit (EITC) can give qualifying workers with low-to-moderate income a substantial financial boost. EITC not only reduces the amount of tax someone owes but may give them a refund even if they don’t owe any taxes or aren’t required to file a return. To learn more give us a call to review your eligibility.
- Taxable unemployment compensation – millions of Americans received unemployment compensation in 2020, many of them for the first time. This compensation is taxable and must be included as gross income on their tax return.
- Interest is taxable income – taxpayers who received a refund on their 2019 tax returns also received interest from the IRS. The interest payments were largely the result of the postponed filing deadline of July 15 due to the COVID-19 pandemic. The 2019 refund interest payments are taxable, and taxpayers must report the interest on their 2020 federal income tax return.
Combining Electronic Filing Plus Direct Deposit Yields The Fastest Federal Tax Refunds
The safest and most accurate way to file a tax return is to file electronically. Many people may be eligible to file electronically for Free! Did you know that most refunds are issued in less than 21 days; wow right? Taxpayers can track their refund simply by using “Where’s My Refund?” on IRS.gov or by downloading the IRS2Go mobile app.
It is important to note that “Where’s My Refund?” is updated once daily, usually overnight, so there’s no reason to check more than once per day or call the IRS to get information about a refund. Taxpayers can check “Where’s My Refund?” within 24 hours after the IRS has received their e-filed return or four weeks after mailing a paper return. “Where’s My Refund?” has a tracker that displays progress through three stages: (1) Return Received, (2) Refund Approved, and (3) Refund Sent.
New this 2020 tax season
There’s a new rule to help people impacted by a job loss or change in income in 2020. Taxpayers can use their 2019 earned income to figure their Earned Income Tax Credit, if their 2019 earned income was more than their 2020 earned income. The same is true for the additional child tax credit.
2020 Maximum credit amounts allowed: The maximum credit amounts are based on whether the taxpayer can claim a child for the credit and the number of children claimed:
- Zero children: $538
- One child: $3,584
- Two children: $5,920
- Three or more children: $6,660
2020 Income Limits: Those who are working and earn less than these amounts may qualify for the EITC:
Married filing jointly:
- Zero children: $21,710
- One child: $47,646
- Two children: $53,330
- Three or more children: $56,844
Head of household and single:
- Zero children: $15,820
- One child: $41,756
- Two children: $47,440
- Three or more children: $50,954
Get a Refund by Paper Check yields the SLOWEST Federal Tax Refund
A paper check is the slowest way to receive your tax refund. If you choose this option, e-filing your tax return will make for speedier processing: receiving a check takes about three weeks from the time the IRS receives your electronic return and six to eight weeks from the time it gets your paper return.
If it has been at least four weeks since you filed your taxes and you are waiting for your refund to arrive, you can check on its status by calling 1-800- 829-4477. Remember when you do call you will be required to provide the following:
- First social security number shown on your return
- The filing status you claimed
- Amount of your refund
If your check takes longer than eight weeks to arrive, it may have become lost in the mail; you’ll need to contact the IRS through the toll-free number 1-800-829-1954 to initiate a refund trace.
If you do decide to request your refund by paper check, ensure the IRS has the correct mailing address on file. If you discover you made an error after you file your taxes, you can correct or change your address with the IRS by completing and submitting Form 8822.10.
Speak with the Right Financial Advisor For You
Finding the right financial advisor that fits your needs doesn’t have to be hard. At Beaton Accounting, we can save you time and money with our professional, efficient tax and accounting services. We are legally bound to act in your best interests; if you’re ready to save time and money give us a call today and we will help you file your tax return so that you receive your federal tax refund the fastest way possible.
A tax professional can also help you if you’re getting huge refunds each year, you may want to consider tweaking your withholding on your W-4 employment form, making adjustments for life changes, such as new dependents or a change in marital status. Then again if you find yourself in the opposite position and your refund is not enough then you may want to consider becoming more organized.
If there’s one thing you can do to save money, it is to be more organized. That means tracking receipts, tax documents, and forms throughout the year. Those essential papers may include receipts for charitable contributions, student loan interest documentation, property tax forms, and other tax documents relevant to your financial life. Whether you’re using a spreadsheet, a digital organizer, or an old filing folder, keep tabs on the documents that can score you the largest feral tax refund.