Yahoo Finance Tax season is delayed — prepare early so your refund won't be
The IRS has announced that tax season is starting later this year — but that doesn't mean you can't get a jump on doing your taxes.
The tax agency will begin accepting and processing your 2020 return on Feb. 12, more than two weeks later than last year.
The COVID-19 relief packages out of Washington — the bills that brought those “stimulus checks” — also brought changes to tax laws, and the IRS says the delay is needed so it can get up to speed.
Here’s what you can do to prepare for tax season, and a few ways to boost your income while you wait a little extra time for your refund.
‘Most important’ filing season ever
Typically, the IRS begins accepting returns in late January. But the tax agency says that if it tried to start the clock normally, it could lead to delays in issuing refunds — and waiting for your refund check is hard enough as it is.
“Given the pandemic, this is one of the nation's most important filing seasons ever,” saysid IRS Commissioner Chuck Rettig.
Rettig says IRS teams have been working non-stop to deliver those second stimulus checks, and the agency will use the extra time for programming and making sure the system runs smoothly. New tax changes — as part of government aid packages — will also introduce a wrinkle to this tax season.
How to plan ahead for your taxes
With tax season already kicking off late this year, you won’t want to delay your refund any more than you need. Don’t just set a reminder for Feb. 12 — you can start doing your taxes today.
Start collecting your W-2s and any other necessary paperwork. You can get started with easy-to-use tax software or with the help of a tax professional. You can complete your returns early and they’ll be filed when the IRS system finally opens up.
One of the easier ways to complete your return would be electronically using popular tax preparation software.
The IRS says the quickest way to get your refund is to file electronically and by making sure you’re set up for direct deposit. If there aren’t any issues, most taxpayers will pocket their refund within 21 days of filing.
Find out exactly what forms and information you’ll need to complete your taxes with our simple guide on filing for the first time.
What if you need a lift before your return arrives?
According to the IRS, last year’s average tax refund was more than $2,500. If the coronavirus is squeezing your family finances, that can’t come soon enough. Here are a few ways to pull together some cash in the meantime:
Refinance your mortgage and slash your payments. Mortgage rates are still sitting close to record lows, and refinancing your existing home loan could provide major savings. Mortgage tech and data provider Black Knight says 19.4 million U.S. homeowners could cut their monthly house payments by an average $308 per month through a refi.
Stop overpaying for insurance. Driving less during the pandemic? Ask your insurance company if they’ll cut your rates. If they won’t give you a break, maybe it’s time to shop around for a better rate. You can also save hundreds on your homeowners insurance by doing some comparison shopping to find a better deal.
Review your budget for savings. Dump any subscription services you're not using. Do more of your own cooking and don’t order takeout as much. You can download a free browser add-on that will save you money every time you shop online by instantly checking for better prices and coupons.
Turn your hobby into cash. Have any in-demand skills? You could turn them into a lucrative side hustle using the world’s largest online marketplace for digital services. Create a profile describing what you bring to the table, and people will find you based on what they’re looking for.
