IRS: Don’t expect tax refunds by a certain date

Taxes IRS AP
Posted at 3:04 PM, Dec 08, 2020
and last updated 2021-01-08 12:15:04-05

Tax refunds, a lifeline for many Americans to help get caught up on bills, or to buy much-needed items, could once again take some time to reach Americans in 2021.

Earlier this year, many tax payers complained about delayed refunds amid the early days of the coronavirus pandemic. The IRS sent many of its employees to work from home, resulting in delays in processing refunds. It was also difficult for many Americans to contact the IRS.

Meanwhile, the IRS was processing millions of economic impact payments as most American adults were eligible to receive a $1,200 payment from the federal government.

The IRS advised tax payers on Tuesday to not rely on a tax refund coming by a certain date.

“The IRS always cautions taxpayers not to rely on receiving a refund by a certain date, especially when making major purchases or paying bills,” the IRS said on Tuesday. “Some returns may require additional review and processing may take longer. For example, the IRS, along with its partners in the tax industry, continue to strengthen security reviews to help protect against identity theft and refund fraud. Just like last year, refunds for tax returns claiming the Earned Income Tax Credit or Additional Child Tax Credit [], cannot be issued before mid-February. This applies to the entire refund, even the portion not associated with these credits.”

The IRS said that the fastest way for tax payers to obtain a refund is to file electronically and request payment via direct deposit.

The IRS said that once a tax return is received, Americans can track their refund using the “Where’s My Refund” tool on its website.

According to the IRS, the agency issued 122 million refunds for tax year 2019, totaling $452 billion. The average refund was $3,704. All told, the IRS processed 253 million tax returns for last year.

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If you’re wondering how you’re affected, not to worry, we have your back. We’re doing the work to make sure our products are up to date and that you can use them to file your taxes with complete confidence.

That said, many folks are wondering what’s in the bill and how it might affect them. Here’s a recap of some of the major tax provisions in the new tax bill and how they may impact you.

Increased Standard Deduction: The new tax law nearly doubles the standard deduction amount. Single taxpayers will see their standard deductions jump from $6,350 for 2017 taxes to $12,000 for 2018 taxes (the ones you file in 2019). Married couples filing jointly see an increase from $12,700 to $24,000. These increases mean that fewer people will have to itemize. Today, roughly 30% of taxpayers itemize. Under the new law, this percentage is expected to decrease.

Increased Child Tax Credit: For, families with children the Child Tax Credit is doubled from $1,000 per child to $2,000. In addition, the amount that is refundable grows from $1,100 to $1,400. The bill also adds a new, non-refundable credit of $500 for dependents other than children. Finally, it raises the income threshold at which these benefits phase out from $110,000 for a married couple to $400,000.

Personal and Dependent Exemptions: The bill eliminates the personal and dependent exemptions which were $4,050 for 2017 and increased to $4,150 in 2018. State and local taxes/Home mortgages: The bill limits the amount of state and local property, income, and sales taxes that can be deducted to $10,000. In the past, these taxes have generally been fully tax deductible. The bill also caps the amount of mortgage indebtedness on new home purchases on which interest can be deducted at $750,000 down from $1,000,000 in current law.

Health Care: The bill eliminates the tax penalty for not having health insurance after December 31, 2018. It also temporarily lowers the floor above which out-of-pocket medical expenses can be deducted from the current law floor of 10% to 7.5% for 2017 and 2018. So for 2018, you can deduct medical expenses that are more than 7.5% of your adjusted gross income as opposed to the higher 10%.

Fastax Has You Covered

Don’t worry about memorizing these tax changes the majority of which are for 2018 taxes that you file in 2019. Fastax has you covered and will be up to date with the latest tax laws. Call us for tax help at 661 493-8512