The Internal Revenue Service (IRS) is delaying the beginning of tax filing season to February 12. This means the 2020 tax returns can be filed and processed 2 weeks later than the previous years, while the deadline on April 15 remains unchanged.
The announcement comes as a result of the law changes made by the Consolidated Appropriations Act, 2021 (CAA 2021), passed last December 27.
“This programming work is critical to ensuring IRS systems run smoothly. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers,” according to the IRS statement.
TAX REFUND
The IRS anticipates to start sending refunds in the first week of March for taxpayers who claim the earned income tax credit and/or additional child tax credit – assuming they file electronically, provide direct deposit information, and no issues are encountered with their returns. Low-income taxpayers who receive the earned income or the additional child tax credit will generally have to start waiting from mid-February for the refund.
ELECTRONIC FILING OF TAX
The IRS is recommending filers to submit their returns electronically and utilize direct deposit when ready. Taxpayers who send their returns via mail might experience delays as the IRS has a large backlog of unprocessed mailed returns from last year. The agency anticipates at least 150 million tax returns to be filed this year.
FLAGGED TAX RETURNS
Getting your return flagged by the IRS is another factor that can delay your refund and cause you significant risks. Ideally, turnaround time for a refund is about 21 days if a tax return has no issues. On the other hand, About 2 in every 10 flagged returns for identity verification had delays of more than 120 days.
Levine and Associates is a team of experienced financial and tax experts. If you’re interested in having a smooth tax return preparation this year, book a free consultation with us as soon as possible at https://calendly.com/levine-and-associates or send us an email at josh@levineandassoc.com.