2021 Tax Filing Season Tips

The IRS has announced that they will begin accepting and processing individual tax returns for the 2020 tax year on February 12, 2021. This delayed start is to ensure they have probably implemented all changes from the second round of Economic Impact Payments and other related benefits. Returns can still be prepared prior to this date, so do not delay in getting us your information. 

Over the past year, the IRS has been substantially behind in processing paper returns and refunds for the prior year. Already understaffed heading into last tax season, COVID has further limited their capacity to process items. They are emphasizing that taxpayers file returns electronically and use direct deposit for any refunds this year. 

The Economic Impact Payments, commonly called stimulus payments, will not be taxed but they will still need to be reported on your tax return. There were two payments, the original back in April 2020 (typically the week of April 13th) and most recently at the end of December 2020. While these are not taxable, they need to be reported to properly determine if you qualify for a larger payment. Additionally, if you did not receive a payment that you were eligible for, you will receive an increased tax refund when filing your 2020 tax return. 

Tips to expedite your refund processing

• Fully review and complete the tax organizer
  • The organizer ensures we have up-to-date contact information for you, including your bank account for direct deposit of refund
• Provide all of your information to us at one time
  • Having to circle back for additional information will delay the preparation of your return
• Choose direct deposit for how to receive your refunds
  • We will need your bank name, account type, routing number and account number
• NEW for 2020 - we will need to know the number of stimulus payments received by the taxpayer, spouse and on behalf of any dependents.
  
• If you have enrolled in the IRS Identity Protection PIN (IP PIN) program, we need this PIN in order to electronically file the return. This PIN is sent via mail to the taxpayer each year.
• Common issues that delay the processing of refunds:
  • Not providing insurance documents when receiving insurance from MNSure or similar state health insurance marketplace
    • We need copies of Forms 1095-A and 1095-B
  • Incorrect estimated tax payment amounts
    • Verify that the payments you made this year match our records in the organizer
    • Provide any notices from the IRS or state that you have received
  • Missing 1099s
    • Verify that we have all of your investment accounts included on the organizer

We are gearing up for another tax season to efficiently prepare a complete and accurate tax return for each client. To ensure the highest quality return at a minimum cost to you, we have provided a number of resources in gathering this information. Call our team today if you have any questions regarding these items.