What to Know About Tax Filing Season Starting February 12

According to the Internal Revenue Service (IRS), the tax season of the nation starts on February 12, 2021, a Friday. That’s when they will formally start to accept and process returns from the 2020 tax year. According to the IRS, they chose this date so they can do extra programming and testing of computer systems given changes in tax laws. These came through last December 27, 2020, and provided a second batch of Economic Impact Payments.

 

Critical Changes

The changes in programming of the whole tax system are crucial. Had filing season begun without any of the new changes firmly in place, refunds would have taken a while longer to get to taxpayers. With these changes, whoever is eligible for the remaining stimulus money will be able to receive it when their 2020 tax return is filed. It will reflect as Recovery Rebate Credit. The IRS’s recommendation for making the refund process go quicker is for taxpayers (or their preparers) to file digitally using direct deposit the moment their filing information is complete. Professional tax preparation software, used correctly, will come in very handy at this point. Filing can be done instantly via the tax professional preferred by the taxpayer. Tax returns are actually already being accepted, though they will be held for now. Transmission to the IRS begins February 12th. Given the global coronavirus pandemic, the filing season of 2020 tax returns is easily one of the most vital ones. The IRS has had to balance non-stop preparation work for the aforementioned tax filing season alongside being able to have Economic Impact Payments delivered on time. The current start date allows people to get any stimulus payments they still have remaining in a timely manner, alongside getting them their much-needed tax refunds as fast as possible. The average tax refund issued from the previous season was at roughly over $2,500. This year, the expected tax returns run in the 150 million ballpark, most of them filed well before the deadline on April 15. Given the PATH act, a refund that involves the Additional Child Tax Credit (ACTC) or the Earned Income Tax Credit (EITC) will not be able to get released before the middle of February. This lets the IRS have more time to prevent fraudulent claims and refunds from being released, especially when there’s identity theft involved. The timeline for the availability of these refunds is around the first week of March for taxpayers that filed electronically with direct deposit. This is granted, of course, that these tax returns have no issues. Paper returns will more than likely encounter processing delays. For those who file digitally that have no other issues, 9 out of 10 of them will have their refund released within three weeks (21 days).

 

Conclusion

According to the IRS, the tax season of the nation starts on February 12, 2021. Professional tax software will be a great tool in preparing things in a timely manner. The IRS encourages filing digitally with direct deposit in order for things to go smoothly. Looking for tax software for preparers? Check out Keystone Tax Solutions today! We are a leader in the professional tax software industry with over 15 years of experience.

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