Getting Ready For The 2021 Tax Filing Season
On January 15, 2021, the Internal Revenue Service (IRS) announced that it will process 2020 tax returns beginning February 12, 2021.
Last year the opening date was January 27, 2020; however, for the 2021 tax filing season this had to be extended to allow the IRS time to do additional programming and testing of IRS systems following the December 27, 2020 tax law changes that provided a second round of Economic Impact Payments and other benefits.
April 15th Filing Deadline.
The filing deadline to submit 2020 tax returns is Thursday, April 15, 2021.
Since the IRS will begin processing tax returns on February 12th there is no advantage to filing tax returns on paper in January instead of waiting for the IRS to begin accepting e-filed returns. Nevertheless, it makes sense to start organizing your information early and so when the IRS filing systems open on February 12th, you are ready to submit your tax return right away.
Refunds in 2021.
Choosing e-file and direct deposit for refunds remains the fastest way to file an accurate income tax return and receive a refund. The IRS still anticipates issuing at least 90%of tax refunds in less than 21 days, but there are some important factors to keep in mind for taxpayers that could cause delay. Under the Protecting Americans from Tax Hikes (PATH) Act, the IRS is required to hold refunds for tax returns which include a claim of the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until the first week of March 2021. Also consider that it would still take several days for these refunds to be released and processed through financial institutions, and factoring in weekends, and the President’s Day holiday, taxpayers claiming these credits may not have actual access to their refunds until the first week of March.
Time Limits For Keeping Your Tax Records
Even though your 2020 income tax return is processed by the IRS and a refund is issued, that does not mean the IRS can later question or audit the tax return, In fact the Statute Of Limitations allows the IRS three years to go back and audit your tax return. That is why it’s a good idea to keep copies of your prior-year tax returns and supporting backup documentation for at least three years.
What Should You Do?
You know that at the Law Offices Of Jeffrey B. Kahn, P.C. we are always thinking of ways that our clients can save on taxes. If you are selected for an audit, stand up to the IRS by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation. The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Orange County (Irvine), the San Francisco Bay Area (including San Jose and Walnut Creek) and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income. Also if you are involved in cannabis, check out what a cannabis tax attorney can do for you and if you are involved in crypto-currency, check out what a Bitcoin tax attorney can do for you.