Businesses and Individuals Must Wait to File Taxes Due to Backlog
IRS encouraging Americans to file their taxes electronically
Last year, the coronavirus pandemic caused many employees to work remotely including Internal Revenue Service (IRS) staff. Additionally, the U.S. Treasury Department extended the tax filing deadline from April 15 to July 15.
The IRS received about 16 million paper returns last year and on December 25, 2020, it was still processing about 6.9 million returns, or 40% of them. As a result, the IRS announced this backlog will be delaying the start of the 2021 tax season to February 12 instead of the end of January, Fox Business reports.
“Given the pandemic, this is one of the nation’s most important filing seasons ever,” IRS Commissioner Charles Rettig said. “This start date will ensure that people get their needed tax refunds quickly while also making sure they receive any remaining stimulus payments they are eligible for as quickly as possible.”
Additionally, the IRS recommended that all taxpayers file taxes electronically this year for no further delays. The agency said they expect nine out of 10 taxpayers to receive their refund within 21 days of filing if they file electronically with direct deposit and have no issues.
In the meantime, the IRS will pay interest on overdue refunds from 2020.
The IRS recommends four tips to make filing easier:
- File electronically and use direct deposit for the quickest refunds.
- Check IRS.gov for the latest tax information, including the latest on Economic Impact Payments. There is no need to call.
- For those who may be eligible for stimulus payments, they should carefully review the guidelines for the Recovery Rebate Credit. Most people received Economic Impact Payments automatically, and anyone who received the maximum amount does not need to include any information about their payments when they file. However, those who didn’t receive a payment or only received a partial payment may be eligible to claim the Recovery Rebate Credit when they file their 2020 tax return. Tax preparation software, including IRS Free File, will help taxpayers figure the amount.
- Remember, advance stimulus payments received separately are not taxable, and they do not reduce the taxpayer’s refund when they file in 2021.