The deadline to submit your 2019 federal income tax returns or file for an extension is April 15, 2020. Yes, want it or not, but the date is closing-in by the day, and we understand that many of you might be jittery about getting through it smoothly.
Fortunately, we have summed up some key points on how you should file your 2019 returns. By keeping the following points in mind, we are sure you can sail through your tax filing experience without any hiccups. Let us take a look.
File your taxes for free
You might have a chance to file your 2019 federal income tax returns or in some cases, state files taxes for free, but only if your gross adjusted income did not exceed $66,000 in 2019.
You can check if you are eligible for filing your returns for free by visiting the IRS website and using the IRS Free File Lookup.
You can also download the IRS2Go Mobile App to find out the free-filing options, check your tax refund’s status, or make a tax payment. This mobile app is a secure platform to make tax payments using direct pay.
For those of you who made more than $66,000 in 2019, can still file your returns for free by using the Free File Fillable Forms. We would recommend you use this form only if you have experience of preparing your returns yourself.
Keep your tax documents ready before February
There are plenty of tax documents that we suggest you collect in advance for a smooth tax-filing experience. If you are an employee, then you would need the Form W-2. If you are a freelancer, then you may need Form 1099s.
In some cases, you might also need other statements to support your returns like income earned from an interest-bearing savings account, or taxable bitcoin gains, or interest paid on loan, etc.
There are many documents that would need to be filed by your employer, or by you if you are a business person.
All these documents should be ready with you in early February itself. By collecting all such essential documents, you can ensure to file your returns properly without any last-minute to run to chase various supporting documents.
E-file your taxes using a direct deposit
Tax refunds usually arrive within three weeks of filing tax returns. To ensure that you receive your tax refunds well within this timeline, you should opt to file your taxes electronically using direct deposit.
As per IRS, the direct deposit payment option in simple, safe, and secure. The IRS uses the same payment method for making Social Security and Veteran Affairs payments as well.
Check the status of your tax refund
Tax refunds usually hit the taxpayer’s account within 21 days of filing the federal income tax returns. Using the direct deposit for making tax payments can even fastrack this time and enable you to receive your refund in a shorter span as well.
You can check the status of your refund using the IRS’s return tracking service 24 hours after filing the return.
The refund status of your state taxes can be checked on the respective state websites.
Use the IRS payment plans to pay your taxes in instalments
Tax situations are dynamic. Your tax liabilities depend on the expense and earning your make in the tax year. Therefore, it is always good to review your W-4 Withholding Form at the start of the new year. By reviewing the same, you can get a clear image of your income tax withholdings and amount of tax payable by you while submitting your tax returns. Checking the same will save you from the shock of an unexpected tax bill.
But, in case, your tax bill is too much to pay in one go, you can always use the payment plans offered by the IRS with lower interest rates than most banks and credit cards. You may also settle your tax bill for a lesser amount using the Offer in Compromise feature or request a deferment until you feel financially stable to clear the tax bill.
Maintain copies of older returns for at least three years
You need not pile up files on files to save your older tax returns. As per IRS, you should keep your last three year’s returns because that is the typical length of time the IRS would go to in case you happen to get audited by them.
Most audits only look back up to two years, but it’s different in the case of IRS because they may go as far back as three years if the situation demands it. You shall make it a point to destroy your older returns with the utmost care to protect yourself against identity theft.
Recourse for victims of tax fraud
The tax season accompanies plenty of opportunities for tax identity thieves. They thrive by using stolen Social Security Numbers and use it for filing fraudulent tax returns, and claim tax refunds. Though the IRS keeps a vigil on such tax time frauds, you should be cautious and handle your confidential data with utmost secrecy.
The best way to save yourself from such tax frauds is by filing your returns in a timely fashion, leaving no room for such fraudsters to fool you.
If you feel you are a victim of such frauds then you should report such incident to the Treasury Inspector General for Tax Administration. You can also find detailed publications throwing light on the recourses for being duped of your returns or refunds.
You can be extra cautious by being aware of the code of communication that the IRS follows. The IRS will never discuss personal tax issues via emails, texts, or social media. Be wary if you ever get contacted by someone claiming to be from the IRS saying you owe money and on non-payment would be arrested or anything alike.
The IRS will only get in touch with you using their mailing service via the U.S. Postal Services. If you receive any such unsolicited communication, be sure to report it at firstname.lastname@example.org.
The Bottom Line
Though most of you must feel jittery about the nearing tax filing deadline if you are thorough with preparing for it in advance, then probably you can sail smoothly through it. The blog details some of the must-know information and ways to file your returns. The MyTaxFiler team would be happy to help in case you would like to have an in-depth discussion about filing your 2019 returns.