Monday January 18, 2021
Plan for Online Tax Filing
With over 200,000 new COVID-19 cases per day, high levels of hospitalizations and limited ICU capacity, many states have published new lockdown orders. While there are now two approved COVID-19 vaccines, the initial doses are being allocated to government officials, healthcare workers and first responders. Officials with the Centers for Disease Control and Prevention estimate it will be April or May before the majority of Americans will receive vaccinations. As a result, it will be important for taxpayers to understand online options during the tax–filing season.
The IRS urges taxpayers to stay home and stay safe by using the online tools on IRS.gov.
If you have earned income of $72,000 or less in 2020, the IRS Free File program is available. You can use a tax preparation software package without cost. You must enter information for your income, deductions, credits and exemptions. The Free File software program will prepare your tax return and enable you to file electronically. Some of the Free File programs also offer a free state tax return.
Even if you have a larger earned income, you may use the Free File Fillable Forms. These are available on IRS.gov. They require more work and effort, but can be used by any taxpayer to file online.
If you would like to work with a professional tax preparer, a great resource on IRS.gov is the "Choosing a Tax Professional" tool. It enables you to use the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This guide may help you find a qualified tax preparer in your area.
A popular helpful tool on IRS.gov is the Interactive Tax Assistant. It answers many different tax questions. For example, you may want to learn if you qualify for the Child Tax Credit or the Child and Dependent Care Credit. You can ask the assistant if you also may qualify for a deduction or credit for higher education costs for yourself, your spouse or a dependent. If you have low to moderate income, the Interactive Tax Assistant can explain the Earned Income Tax Credit. The IRS plans to release an enhanced version of the Interactive Tax Assistant in January 2021.
After you file, you can benefit from the "Where's My Refund?" tool. This will usually be available about 24 hours after you have filed your return. It updates each day at midnight.
The IRS urges you to have your tax refund direct deposited into your bank or other financial account. There is additional information about online filing in Publication 5348, Get Ready to File.
Editor's Note: With the COVID-19 lockdowns, you may want to use a tax preparer and meet virtually. Many tax preparers are planning to use webcams, conference calls or other online methods for meeting with clients.