BBB Serving Northern Colorado and Wyoming Has Tips for Preparing for Tax Season
With 2020 in the rearview mirror, many consumers are getting ready for tax season. The IRS has delayed tax filing season this year until Friday, February 12, 2021. This is the date the IRS will begin accepting electronic and paper returns and begin processing them for refunds and tax payments. The delay is due to software changes that need to be made as a result of the second COVID-19 stimulus package that was approved late in 2020 (technically those stimulus checks or Economic Impact Payments are tax refunds).
That doesn't mean it's too early to begin preparing your taxes. You can do everything up to filing prior to February 12, including gathering documents and filling out your return. This year it will also be more important to file early than in year's past. COVID-19 may cause delays in the IRS receiving and processing your return, which may delay your refund. In addition, the extra time before you can file means more time for scammers to prepare their own fraudulent return in your name and have it ready to go when the IRS begins accepting returns.
While you wait for the filing window to open, BBB Serving Northern Colorado and Wyoming has tips to help you get your return in quickly and smoothly.
Gather and organize all documentation. This includes W2s, receipts related to any deductions you may claim, other income statements, etc. For some people, this will include unemployment income and independent contractor income (if you worked as a food delivery driver).
Make a list of major life changes. If you got married or divorced, had a child, or changed jobs, make sure you understand the impact of those changes on your tax return.
Research which new deductions you may qualify for. With many more people working from home and having to purchase equipment and supplies to do so, more taxpayers are likely to try to take advantage of deductions like the home office deduction. But it is notoriously good at tripping up taxpayers, so make sure you understand whether you qualify, how much you stand to save, and whether it is worth itemizing to claim the deduction vs. taking the standard deduction.
Consider what type of tax help you may need. Depending on your tax situation, you may be able to simply fill out the standard forms. Or you might need additional assistance, whether that be a software program, tax preparer, tax accountant, or tax attorney. If you need any of these services, give yourself plenty of time to do research to make sure you are getting the assistance you need at a fair price. BBB.org can help you find BBB Accredited tax professionals, check out customer reviews, and see any complaints filed with BBB.