Here’s one perk from the pandemic: Once again, the deadline for filing taxes has been moved back from April 15 to May 17, 2021. Even though it’s a little shorter extension than last year’s July 15 deadline, it still means we get a little breathing room.
Or do we?
Because, as the eve of the original deadline approaches, we realize that there are questions—lots of them—about what we have to and don’t have to file that we haven’t had to deal with in years past:
Is your stimulus check taxable? No.
If you received unemployment, is that taxable? Maybe.
Yep. Even taxes are different.
Even Ben Franklin might have had to study all of the tax law changes for 2020!
One thing hasn’t changed: According to CNBC, approximately 70 percent of Americans (about 100 million people) are eligible to file with Free File, a free program through the IRS. It may be a good idea to check into it; in a year in which millions have lost jobs and income, hiring a tax professional can be costly.
It’s not just the federal filing date that has been moved back; California’s state tax filing deadline has also been pushed back to May 17.
“We recognize what a challenging year this has been for Californians statewide,” said State Controller Betty T. Yee, who serves as chair of the Franchise Tax Board (FTB). “Hopefully, this small measure of relief will continue to allow people to focus on their health and safety and navigate the complexities caused by the pandemic.” This postponement applies to individual filers whose 2020 tax returns and payments were originally due on April 15, 2021. You can also file state taxes for free via FTB’s Cal-File if you qualify.
If you don’t qualify for free tax filing or don’t have time to do it yourself, an accountant may be able to help. Make sure the accountant you hire to file your taxes is licensed in good standing with the California State Board of Accountancy (CBA).
Accountants face a plethora of new tax-related legislation due to the coronavirus pandemic; if the tax person you use only works during tax season, he or she may not be aware of all of the new laws and how they might affect your tax status.
According to Forbes magazine, tax professionals should be asking you six key COVID-19 related tax questions this year:
- Did you get your stimulus payments?
- Are you eligible for the Earned Income Credit?
- Were you working from home?
- Did you receive a Form 1099-G?
- Did you take COVID-19 related distributions from a retirement account?
- Were you unable to work because you had COVID-19 or because you were caring for someone with COVID-19?
Whether you’re a do-it-yourselfer or you hire a professional make sure you have the answers to these questions. And, above all, don’t procrastinate. When the IRS opened for the 2021 tax season on February 12, they cautioned taxpayers to expect limited face-to-face operations, heavy call volume, and paper-processing delays.
Here’s one way to help you get your refund faster: request that your refund be sent via direct deposit. The IRS says that most refunds are sent within 21 days of e-filing; you can check the status of your refund by using the “Where’s My Refund?” tool on the IRS website. You can check the status of your California state tax refund on the FTB website.
So gather your W-2s, 1099s, and all of those other papers and get ready for a tax year like never before.
Find Out More About Choosing a Certified Public Accountant:
CBA offers two great online consumer resources that can help you find the CPA you need: Take a look at the Consumer Assistance Booklet and How to Select a CPA.
Looking for Free Filing? Read This First:
“Free Tax Filing? Watch Where You Click”
The clock is counting down: don’t wait!
