What to Know About Your 2020 Taxes

Due to the effects of the pandemic, the U.S. Internal Revenue Service made a rare decision when it extended the deadline to file tax returns to July 15th. States also followed suit for the same reason. CNBC reports that roughly 10% of Americans decided to take advantage of the extension. If you waited until recently to file or intend to file soon, there’s a lot of information to take in. We’ve broken down some details about taxes so that you can file stress free. Here’s some helpful tips for  tracking your tax refund, quickly receiving your refund, and helping you get ready for next tax season.

How To Track Your Tax Refund

If keeping your finances afloat depends on receiving your tax refund, you might feel especially anxious about why you have not yet received it. Here are three tips to help you resolve the issue.


1. Exercise Patience

Unfortunately, due to all the extra measures governments are taking to ensure the safety and well-being of residents, this has caused a lot of processes to slow down. Because of this, you might experience a longer-than-normal wait time or processing time when you file your 2019 taxes. Please note: paper filing of taxes can take several weeks to process, and digital filing can also take a few weeks. If more than six weeks go by for a paper filing or more than 21 days go by for a digital filing, you should consider contacting the local IRS office.


The local office might be able to provide you with information about whether your return was successfully processed and when to expect the refund. You can also try calling 800-829-1040.


2. Use the IRS Refund Tracker

Many U.S. tax revenue jurisdictions that collect income taxes have a website where you can track the status of your refund. A simple Google search will help you find the website for your specific state, however, make sure to double check the legitimacy of the webpage. Scammers have been known to create fake websites to take advantage of taxpayers. 


Note that each website might require different personal data input to get the information you need. Here are the requirements for the IRS refund tracker:

  • Your TIN or Social Security Number
  • Your exact refund amount
  • Your filing status


3. Ask Your Tax Preparer

Good tax-preparers provide follow-up services. These services allow you to reach out long after your return was filed with questions you may have. In this instance, you might want to know where your refund is or why it’s taking so long. The tax preparer should have the necessary information to check your refund status online. If the IRS states something is wrong with the return, they should then resolve the issue.


Note that not all tax preparers are reputable or even professionals. Many do not offer follow-up services. Because of this, always choose wisely when hiring someone for this very important job, especially if you find you are too busy to handle any tax-related issues on your own.


How To Get Your Tax Refund Even Faster

If you have not yet filed your return, there are a few things you can do to make sure you receive your refund as soon as possible.  Remember: because of the unique situation the pandemic presents and its effect on revenue departments, these are only suggestions and might not work for everyone.


1. File Electronically

Maybe you like the good old days of doing everything by paper or find that you make fewer errors by filing by paper. Your tax preparer might also insist on using paper returns. However, filing electronically is a much better option right now and will help speed up the process. Due to limited staffing, the IRS is taking longer than usual to process paper returns, so filing electronically will help you receive your refund faster.


2. Use Direct Deposit

Asking for a check can also slow down the process, especially if you filed jointly with your partner. This is because after receiving a check, you might face greater restrictions with your bank to clear a check sent to both parties. Some banks require both people to visit a branch to cash these in person. Direct deposit is faster and you skip over many of the technicalities involved in cashing a check. Additionally, you make sure that your money does not end up in the wrong hands.


3. Don’t Procrastinate

Everyone should aim to feel more understanding of the obstacles the pandemic creates for government agencies and their workers. Even so, if more than 21 days go by, use the options highlighted above to track your return. Keep in mind that other factors might be at play. For instance, your return might have gotten lost in the mail or the IRS spotted a discrepancy when processing. Ask as soon as possible to get a head start on potential problems.



How To Prepare for Taxes in 2021

This year brought a lot of changes that tax preparers are already scrambling to become familiar with. Here are few ways you can make tax season easier on you for next year.


1. Adjust Your W-4

Many people never take a second look at their W-4 forms after filling them out at the start of a new job. Subsequently, your employer might remit more taxes on your behalf than necessary, which is why many people receive a lump sum at the end of the year. Some people prefer that lump sum at tax season, but if you could use some extra money on a monthly basis to make ends meet, contact your employer to update your W-4.


2. Evaluate Your Estimates

If you are self-employed, then you likely pay what the IRS calls estimated taxes. This involves taking a look at your revenue and expenses for each quarter and making payments based on what you think you owe. If you could also use more money each month instead of a lump sum refund, talk with an accountant about how to better estimate your taxes.


3. Donate Money or Goods

To make tax season a little easier on your bank account, consider donating money or goods to local non-profit organizations. Always ensure you get a receipt to file with your tax return. The IRS allows you to deduct the value of donations up to half of your adjusted gross income.


4. Spend With Taxes in Mind

When you spend money, even on investments, consider the tax value. For instance, you can deduct interest on a mortgage from your taxes, but you cannot do this if you rent. Similarly, you can earn tax grants from investing in solar power, but not from landscaping the yard. Additionally, some investment options carry better tax incentives than others. Work with an accountant or financial advisor who can assist with tax planning.

By using the tips above, you might find it easier to track your refund and receive your refund quicker, while also planning for taxes in 2021. Need some help with financial planning or do you have other financial goals you need to reach this year? From offering credit to assisting with wealth management, we’re ready and waiting to help. Contact us for more information.


Meghan Moss
VP Retail Sales Manager