June 24, 2020
Tagged As: Personal
In response to the COVID-19 Pandemic, the federal government has extended the tax filing deadline from April 15 to July 15 this year. With all the challenges Americans have faced in 2020, it’s no surprise that many people haven’t sent in their tax returns yet – the IRS has received about 8.5 million fewer tax returns this year compared to the same time last year.
Though some people look forward to getting a tax refund, others have concerns about doing their taxes. According to a 2019 WalletHub survey, people’s biggest Tax Day concerns include:
- Making a math mistake: 31%
- Not having enough money to pay taxes due: 28%
- Identity theft: 24%
- Getting audited: 17%
Do you share any of these concerns? Here are a few tax preparation tips to help your peace of mind:
- The IRS is currently backed up with (physical/paper) tax filings they’ve received while they haven’t been in their offices due to COVID-19. To receive your refund in the fastest and most secure way, the IRS recommends choosing e-file and direct deposit for refunds.
- To help prevent identity theft the IRS recommends filing earlier in the tax season.
- Visit the IRS website (irs.gov), which is full of valuable information
- Gather all important tax documents using documents collected last year as a guide • All taxpayers must save their tax documents for at least three years. A few important documents include:
- 1099s (miscellaneous income, interest, dividends, certain government payments, distributions from pensions, annuities, retirements, etc.)
- Form 1098 - Mortgage Interest
- Vehicle registration fees paid in 2019 and state sales tax paid on cars purchased in 2019
- Receipts and other proof of charitable contributions made in 2019
- Review your return for errors. Check spelling on names, social security numbers, calculations, and inputs on line items.
- Sign and date your return (along with your spouse)
- Consult your tax professional for help
All taxpayers should continue to watch out for identity theft scams by people pretending to be IRS representatives through email or phone communications. Remember, the IRS will never:
- Demand immediate payment without first having mailed the taxpayer an explanation of additional tax due
- Demand that the taxpayer pay taxes without giving them the opportunity to question or appeal the amount said to be owed
- Require a specific payment method to be used to pay tax owed
- Ask for credit or debit card numbers
- Threaten to bring in local police or other law enforcement groups to have the taxpayer arrested for not paying
Finally, the deadline to file Iowa’s income tax is July 31, 2020.
This information is provided for informational purposes and is not intended to substitute professional advice.