The 2020 tax filing season is officially underway, with an April 15 deadline set for filing.
According to www.irs.gov, more than 150 million individual tax returns are expected to be filed for the 2019 tax year, “with the vast majority coming before the April 15 tax deadline.”
Alyss Harris, who operates the Liberty Tax franchise in Jacksonville, said that traditionally, the people who seek her help come in early.
A $50 referral fee offered by the company through Feb. 28 for new clients is one incentive for folks to file early; discovering how an earned income tax credit (EIC) can affect their refund status, brings business in early, as well, she said, noting that most come “when get off work – that's our busiest time.”
According to the IRS, the EIC “is a benefit for working people with low to moderate income” and reduces the amount of tax owed, to a point where a refund is possible. However, “to qualify, you must meet certain requirements and file a tax return, even if you do not owe any tax or are not required to file.”
The EIC “is a vital tax credit that helps millions of hard-working families around the nation,” said IRS Commissioner Chuck Rettig. “It's critical that people review the credit to see if they qualify.”
The IRS estimates four of five eligible taxpayers claim and receive the EIC; in 2019, approximately 25 million taxpayers nationwide received more $61 billion in EIC, with the average amount received of $2,504.
The EIC is as much as $6,557 for a family with children or up to $529 for taxpayers who do not have a qualifying child, the site noted.
“But even if they owe money, I see a lot of people coming in early,” Harris said, adding that the company figures projections for a daily basis, “and sometimes it exceeds our projections. Last year, we had about 300 people we helped.”
Meanwhile, the website www.daveramsey.com outline changes this season that will impact an individual's 2019 taxes. They include an income tax bracket increase in 2019 to account for inflation; an increase in standard deductions – $12,200 for single filers and $24,400 for married couples filing jointly – and no penalty for not having health insurance coverage.
“Just as long as you have a 1095 on the Obamacare (the Affordable Care Act) , you won't get penalized this year for not having” health insurance, Harris said. “The last three years, you could be penalized, and you had to show proof – and a lot of people were getting penalized for not having insurance.”
While there is an option to file traditionally by submitting a paper document, more and more people are filing their taxes electronically: The IRS expects about 90 percent of individuals to file their returns electronically.
“E-File really speeds up the process,” Harris admitted. “We barely do paper (filing) … when you do that, you have to pay (fees) out of your pocket, but as far as E-Filing, that (fee) comes out of the return – you don't have to pay up front).”
The process taxes approximately 21 business days on average, although she noted that each case varies.
“The IRS urges all taxpayers to make sure they have all their year-end statements in hand before filing. This includes Forms W-2 from employers and Forms 1099 from banks and other payers. Taxpayers should confirm that each employer, bank or other payer has a current mailing address or email address. Typically, year-end forms start arriving by mail – or are available online – in January. Review them carefully and, if any of the information shown is inaccurate, contact the payer right away for a correction,” according to the IRS website.
However, Harris said, the most important thing to remember is to bring along a form of personal photo identification and a copy of your Social Security number.
“That's what a lot of people forget to bring with them,” she said. “Also, if you're doing direct deposit into a bank account, we'll need the routing number and account number to file it properly.”
Information on additional topics related to filing taxes may be found at www.irs.gov.