As we ring in a New Year every year, the excitement eventually paves the way for certain realities such as paying taxes! Yes, taxes must be filed yearly, and 2020 is no different as the IRS is currently processing returns for the year 2020, but there are some changes to the 2020 filing, due to the COVID-9 pandemic and the IRS wants taxpayers to understand the changes before filing. Below, you will find a brief list that provides an overview of some of the Federal Tax System for 2020 tax filing and what you can expect.
Taxpayers should file accurate returns electronically.
Firstly, the IRS advises that everyone organizes their tax records to enable more preparations for returns easier. The best way to do this for accuracy is to file tax returns electronically. The IRS expects electronic filings because it minimizes errors and helps the taxpayer get things right from the start.
Taxes can be done for free online or in person.
To expedite the filing process, the IRS has partnered with software companies nationwide to offer services like IRS Free File and the Free File Fillable Form that offers free tax preparation products for taxpayers. Therefore, taxpayers do not require a computer as they can access these free tools via a smartphone.
The Free File product also offers free online tax return preparations and free electronic filing. Taxpayers only have to check the Volunteer Income Tax Assistance and Tax Counseling for the Elderly (VITA/TCE) to discover a location closest to them. There are volunteers at those centers who will help them prepare their taxes, but some VITA/TCE sites only help taxpayers remotely as some are closed because of the impact of the Coronavirus. For military service members, qualifying members and veterans can use the Free MilTax services to prepare and file federal and state taxes electronically.
Tax refunds
Just as taxes are filed online, taxpayers can get their tax refunds online too. All you have to do is file electronically and select the 'Direct deposit' while filing for an accurate income tax return, and you will get your refund. According to the IRS, 8 out of 10 taxpayers got their refunds through the "Direct deposit" platform. The IRS also uses the same electronic transfer system to pay tax refunds that other federal agencies use to pay veterans' affairs benefits.
Pay taxes electronically
If you owe taxes and want to make payments, the IRS announced that you could do so online either by phone or from a mobile device. The electronic payments are safe and secure (so don't worry about your taxes being misplaced). The IRS also uses secure encryption technology to process the charges and doesn't keep taxpayers' bank numbers used to make payments.
With any of the IRS electronic payment options, the taxpayers are 100% in control of paying their tax bills without any concerns for third-party interference. The taxpayer also determines the payment date and gets instant confirmation from the IRS. More so, the Direct Pay system from the IRS is free.
Account information
With this new online direction from the IRS for the 2020 Federal tax systems, taxpayers access their accounts online, where they can view amounts owed as well as tax payment plans. Taxpayers can also view their payment history, pending payments, and scheduled payments and get digital copies of some notices. All significant information from their recent tax returns as they were initially filed can also be accessed online.
Eligibility for tax credits
2020 was a year where people experienced changes in their income and life events in general. Therefore, tax credits and deductions will mean a lot to the taxpayer. Some credits may lead to a refund (even if the person owes taxes), and people can ascertain if they are eligible for such credits on the Earned Income Tax Credit (EITC), the Recovery Rebate Credit platform.
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