The most important question many taxpayers are asking right now is: “When will I get my refund?” The IRS announced on January 15th it will start accepting tax returns filed in 2021 (for tax year 2020) on Friday, February 12, 2021. The IRS is starting to accept tax returns later this year to give them time to issue the second round of stimulus checks. Although the later 2021 tax dates may feel like a disappointment, it is important to remember the IRS cannot issue most refunds until mid-February anyway. Under the Protecting Americans from Tax Hikes (PATH) Act of 2015, any tax returns receiving a refund due to the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) cannot be processed until mid-February. This law was designed to protect families against tax fraud by allowing the IRS additional time to identify identity thieves. This stops your refund from being held up for weeks, if not months, in the event it is claimed by someone else.
The IRS urges people that the quickest way to get your refund is to file electronically (e-file) and choose to have your refund direct-deposited into your bank account. Also, it is extremely important you file your tax return correctly with all your required tax forms completed correctly. The IRS expects taxpayers will start receiving their refunds the first week of March if they file correctly, electronically, and have their refund direct-deposited. If it has been several days since you filed your tax return, you can check the status with the IRS here. You can also check the status of your Ohio tax refund here.
Two of the most common mistakes to avoid, so you receive your tax refund quickly are the following: 1) forgetting a W-2; and 2) not completing the health insurance form correctly.
One of the most common mistakes is forgetting to add a W-2. It can be easy to forget one if you had multiple jobs. If you forget a W-2, the IRS may withhold your tax refund until your tax return is completed correctly.
Another common mistake that can hold up your tax refund is if you receive health insurance through the exchange (Affordable Care Act / Obamacare) and do not fill out Form 8962, Premium Tax Credit (PTC), correctly. If you have health insurance through a private company, like through your employer, you do not have to worry about this form. Although you may receive Form 1095-B or 1095-C to confirm your health insurance coverage, these forms are for your information only. You do not need either 1095-B or 1095-C to complete your tax return. Most tax preparers will not ask you to provide a copy. However, if you receive health insurance through the Affordable Care Act, you should receive Form 1095-A. You may receive it in the mail, or you may need to login to your online account you used to purchase the health insurance to obtain a copy. You will need to take Form 1095-A to your tax professional, so they can complete Form 8962 correctly for you.
If you file your tax return without all your W-2s or fail to complete Form 8962 correctly, when required, the IRS will withhold your tax refund until you have corrected the errors. This can delay your tax refund by weeks.
As last year showed us, 2021 tax dates definitely are not written in stone and can be changed. However, as of right now, the following tax deadlines apply to tax returns filed in 2021 for tax year 2020. Make sure to check with your tax professional.
Filing Deadlines. The tax deadline this year is Thursday, April 15th, 2021. This deadline applies to most taxpayers. If needed, you can file an extension, which will allow you until Friday, October 15th, 2021 to file. However, any tax owed is still due on April 15th.
The tax deadline for S-corps, which operate on the calendar year, and Partnerships is Monday, March 15th, 2021. You can file an extension to allow you until Wednesday, September 15th, 2021 to file. Just like with individual tax returns, any tax owed is still due on the due date. For S-corps and partnerships, this means the tax balance owed needs to be paid by March 15th, even if you file an extension.
W-2 & 1099-NEC Deadlines. Employers and companies have until January 31st most years to mail out their W-2s to employees and 1099-NECs to independent contractors or other companies and individuals they paid throughout the tax year. Because January 31st falls on a Sunday in 2021, the IRS has extended the date until February 1st, 2021. If it is the middle of February and you still haven’t received your W-2, read here for the easiest way to obtain a copy of your W-2.
1099-MISC & K-1 Deadlines. Many other tax forms including 1099-MISC and K-1s do not have to be filed until Monday, March 15th. This means if you won a prize or lottery amount or own part of a company or partnership, you may not receive the necessary documents to file your tax return until the end of March.
Most taxpayers should receive their refunds within 21 days if they file electronically and choose to have their refunds direct-deposited into their bank accounts. This is the way the IRS encourages taxpayers to file. The IRS expects most taxpayers, who file early, to start receiving their refunds the first week in March. The accounting and tax preparation professionals at Gudorf Tax Group will help ensure your taxes are filed correctly and electronically in accordance with the 2021 tax dates. Call to schedule an appointment today.