2021 tax tips and some motherly advice

Get a closer look at the 2021 tax filing season. The IRS offers up tax tips on filing your 2020 tax returns. From electronic filing and online resources to claiming the new Recovery Rebate Credit, find out more about what the IRS is doing during the pandemic to help taxpayers navigate these unusual circumstances to file your taxes this year.

Get to know the IRS, its people and the issues that affect taxpayers

By Dietra Grant
CL-21-14, April 29, 2021

I’m Dietra Grant and in addition to serving as the Customer Account Services Director in the Wage and Investment division at the IRS, I’m a mom. So, I thought I’d use my skills from both professions to share some tips for this tax season.

My daughter had a flat tire on the highway while driving to work in early April. As a mother, I was worried about her safety but also knew she was prepared to handle the situation, step-by-step. First you call your manager, then you call the towing company, then you call your mom so she can tell you to stay in the car and don’t get out until the tow truck arrives! Preparing to file your taxes is similar. Plan a date to file, gather your documents, and bring in experts if needed - which could very well be your mom. With the delayed due date, we all have even more time to prepare.

We know the pandemic has been a tough time for many people and we will continue to help taxpayers navigate these unusual circumstances. In most years, people send in their tax return and only deal with IRS one time. But lately, between the Economic Impact Payments, deadline extensions and other changes, people have been hearing from IRS a lot. Recently, we announced the extension of the federal income tax filing due date for individuals for the 2020 tax year from April 15, 2021 to May 17, 2021. So, take a deep breath and use this extra time to gather your information and file a complete return.

Also, taxpayers can postpone federal income tax payments for the 2020 tax year that were due on April 15, 2021 to May 17, 2021, without penalties and interest. This postponement applies to individual taxpayers, including those who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on unpaid balances as of May 17, 2021. People can automatically avoid interest and penalties on any taxes paid by the new deadline.

After having a conversation with coworkers at her office about filing taxes sooner or later, my daughter asked me what I thought. I told her that just because the deadline has been pushed back to May 17, she shouldn’t wait around to get her refund. And neither should you! For most people, filing a tax return is just a way to ask IRS for the money you are owed. So, if you’re due a refund, file as soon as possible to get your money. Most tax refunds are issued within 21 days if there are no issues with the return. And we always suggest you request your refund be sent via direct deposit. This safe and secure delivery means your refund goes directly into whichever account you decide, and you don’t have to wait on a check coming through the mail.

Online and multilingual access

In my current role as Customer Account Services Director, and former Customer Assistance, Relationships and Education Director, multilingual access is a passion of mine. The IRS serves so many people and I believe that we need to “meet you where you are.” There is so much information on our website, IRS.gov, to assist people in preparing and filing their taxes, and we’re making that information more accessible to people more comfortable in languages other than English. Because our phone lines continue to be extremely busy, the best place to start is online.

One of the things available on our website is IRS Publication 17, Your Federal Income Tax. This can serve as your instruction manual for filing a tax return. It covers the basics, it’s been simplified this year, and it’s now available in several languages.

Our goal at the IRS is to help all taxpayers, no matter where you live, your background or what language you speak. For the first time, the 2020 Form 1040, U.S. Individual Income Tax Return, is available in Spanish. You can also tell us if you’d prefer to be contacted in a language other than English.

Need more time to file?

I want to share a few more important tidbits with you that can get lost in the news. If you won’t be ready by May 17 due to unforeseen bumps in the road and need more time to file, you can always get an additional extension to October 15 using IRS Form 4868 or by requesting an extension through Free File on IRS.gov.

Just know that an extension of time to file is not an extension of time to pay. If you are asking for an extension, you should estimate your tax liability and pay it by May 17 to reduce penalties and interest.

Recovery Rebate Credit

Now it’s time for me to tell you what my daughter picks on me about. Oftentimes, I just jump right into a text, email or website focused only on the information I want to share or think I need, without looking at the bigger picture. I’m working on it, but change can be hard. So, learn a lesson from me and look carefully at the available IRS information so you don’t miss something important. Specifically, this tax season, make sure you receive all the money you are entitled to for the first and second Economic Impact Payments (EIP) by carefully reviewing the rules for the Recovery Rebate Credit (RRC) on this year’s tax return. This credit was designed to ensure that anyone eligible for a payment that didn’t receive some or all of it can claim the credit and get the money owed to them. Most people received Economic Impact Payments automatically, and anyone who received the maximum amount does not need to include information about their payments when they file.

However, if you didn't receive a payment or only received a partial payment, you may be eligible to claim the Recovery Rebate Credit when you file your 2020 tax return. It’s very important to note that even if you normally don’t file a federal tax return, you should consider filing this year to see if you are eligible for the rebate.

Third economic impact payments

Following approval of the American Rescue Plan Act on March 12, 2021, IRS immediately began sending the third Economic Impact Payments by direct deposit.

Most payments were automatic and, in many cases, similar to how people received the first and second round of Economic Impact Payments in 2020. You can check the Get My Payment tool on IRS.gov to see the payment status of the third stimulus payment if you haven’t already received it.

Most eligible people received $1,400 for themselves (those filing joint returns will get $2,800) and $1,400 for each of their qualifying dependents claimed on their tax return. Unlike the first two payments, the third stimulus payment wasn’t restricted to children under 17. Eligible families should have gotten a payment based on all of the qualifying dependents claimed on their return, including older relatives like college students, adults with disabilities, parents, and grandparents.

If a taxpayer's payment was less than the full amount and was based on their 2019 return, they may qualify for a supplemental payment after they file their 2020 return. The IRS will automatically reevaluate their eligibility. If taxpayers are entitled to a larger payment or the full payment, the IRS will send them a supplemental payment covering the difference between what they originally received and the larger amount.

Just like the first two rounds of payments, the IRS automatically sent the most recent stimulus payment to people who didn't file a return but receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) or Veterans Affairs benefits.

While payments were automatic for many people based on their federal benefits information, some may need to file a 2020 tax return, even if they don't usually file, to provide information the IRS needs to send payments for any qualified dependent. People in this group should file a 2020 tax return to be considered for an additional payment for their dependent as quickly as possible.

Ways to file

The IRS recommends you file your tax return electronically. There are three important reasons: first because the tax software will ask you a series of questions and offer prompts that will help identify what deductions and credits you may be eligible for, which could mean more money coming back to you. Second, the software does all the math computations so your tax return, based on the information you provided, will be more accurate. And, third, filing electronically is much faster than paper filing.

Filing your federal tax return for free

Did you know that you might be eligible to prepare and file your federal tax return for free? There are several options for those who qualify including Free File, which is available for people who make $72,000 or less.  

The IRS Free File Program is a public-private partnership between the IRS and many tax preparation and filing software industry leaders who provide their brand-name tax preparation and filing products for free.

Impacted by disasters such as wildfires, flooding or hurricanes?

Special tax law provisions may help people and businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a disaster area. If you were impacted in a federally declared disaster zone, some of your 2020 tax deadlines may have been extended.

Need to make a payment?

As I have told my daughter, while paying taxes might not be fun, it should not be difficult. When paying your taxes, keep in mind:

• Electronic payment options are the quickest and easiest way to make a tax payment.
• IRS Direct Pay is a free, easy way to pay online directly from a checking or savings account.
• You can choose to pay with a credit or debit card, although the payment processor will charge a processing fee.
• The IRS2Go app provides mobile-friendly payment options such as, Direct Pay and credit and debit card payments, on mobile devices.
• You can pay using tax software when you e-file. If using a tax preparer, ask the preparer to make the tax payment electronically.
• Taxpayers may also enroll in the Electronic Federal Tax Payment System and have a choice of using the internet or phone by using the EFTPS Voice Response System.
• And, don’t forget about IRS.gov/account to securely view your federal tax account. You can create an account and view the amount you owe, access tax records online, review payment history and view key tax return information from your most recent tax return.

The pandemic is impacting everyone, but our dedicated employees are working very hard to ensure you have the necessary resources to file your taxes. The help you need preparing your taxes this year is often just a click or two away with our various online resources.

Dietra Grant
Director, Customer Account Services