A Shelby Township Man Wonders
James Hanlon filed his return in late March but he and his wife Janice continued to wait around the Fourth of July for what they thought would be a tax refund of around $4,800.
“My tax return has been in a black hole for three months now,” said Hanlon, who lives in Shelby Township.
Hanlon, 71, retired from a job as a retail help desk manager at Comerica Bank. He likes to problem solve and has prepared his own tax returns for years using TurboTax. He remembers one issue several years ago when he mistakenly missed reporting capital gains from a mutual fund. But otherwise, he said, everything has been fine working with tax software.
He isn’t sure what created the delay. But after hearing that the IRS had issues relating to the Recovery Rebate Credit, he began to wonder if that was the trouble spot.
The Recovery Rebate Credit found on Line 30 of the 1040 form was brand-new on the 2020 income tax returns. The worksheet itself doesn’t use the words “stimulus payments” but that’s what the worksheet involves.
The one-page worksheet has 21 lines and talks of EIP 1 and EIP 2 and says to put in a zero on some lines if $2,400 was received for EIP 1 for a couple and $1,200 was received for EIP 2 for a couple. EIP stand for Economic Impact Payment.
The credit was put on the tax return to enable people who didn’t get a first and second Economic Impact Payment, known as a stimulus. The credit also helps those who got less than the full amount owed to them to now claim what they were owed.
Tax Refund Calculator: How Much Will Margaret Get Back In Taxes
How much does she stand to get back?
Subtract the red circle from the blue for the refund.
Uncle Sam might owe Margaret $14,465 when all is said and done. And if her situation doesnt change in 2021, her refund will actually grow to $20,584.
NOTE: Everyones tax situation is unique and any online tax refund calculator will, at best, provide you with a rough estimate of how much youll get back. The two examples above are incredibly simple and dont fully capture the nuances of someones actual financial situation.
Play around with them and be as specific as you can. The more details you can provide the better of an idea youll have of what youll receive for your refund.
So now you know roughly how much youll be getting back and youre ready to collect the money Uncle Sam owes you.
Before you hoist your Dont tread on me flag and march down to the IRS building to get your money, you should know about all the ways you can get your tax refund.
What Is The Tax Year For 2020
IRS Income Tax Forms, Schedules and Publications for Tax Year 2020 January 1 December 31, 2020. 2020 Tax Returns are due on April 15, 2021. The tax forms and schedules listed here are for the 2020 Tax Year tax returns and they can be e-filed via eFile.com between early January 2021 and October 15, 2021.
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What If Your Child Was Born In 2021
When it comes to a little one born in 2021, the IRS said at some point down the road later this year. you will be able use its portal at IRS.gov to update that information and start receiving the advance credit, if you qualify. That option isn’t available now, however.
In addition to losing sleep and changing diapers, you’ll need to pay attention to when the Child Tax Credit portal at IRS.gov will allow you to update information on your baby to receive the advance credit this year.
And you’d be able to reconcile the credit on the 2021 income tax return and receive what you’re owed next year, if you qualify.
Some speculate that another round of refund delays could be ahead next year, if the IRS needs to manually review returns that have mistakes when it comes to reconciling the advance payments for the Child Tax Credit.
Next year, you’re going to need to make sure what is being reported on the 2021 tax returns accurately reflects IRS records for how much of the Child Tax Credit was already paid out to you in 2021.
Hetherwick, of the Accounting Aid Society, said you need to hold onto IRS Letter 6419 that will be mailed in January 2022 to those receiving the advance Child Tax Credit this year.
IRS Letter 6419 will contain the amount of advanced payments that a tax filer received, Hetherwick said, and it will be very helpful for tax preparers to more accurately prepare tax returns.
For many, though, it looks like we could be heading into another storm.
Why Is My Tax Refund Delayed
Tax refunds can be delayed for a variety of reasons, most commonly:
- The return includes errors or is incomplete
- The return is affected by identity theft or fraud
- The return includes a claim for refundable tax credits
- Your bank doesn’t process payments on weekends or holidays
You shouldn’t contact the IRS about a delayed refund unless you receive a notice in the mail or see a message in the tracker tool to call.
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Where Is My Tax Refund
Once you file your taxes, you may be concerned about when your tax refund will arrive. Thankfully, the IRS has a tool on their website that can clear up your anxiety.
After you click on the Wheres My Refund link, enter your refund amount, your filing status and either your Social Security number or your individual taxpayer identification number. Then youll know whether your federal tax refund is on the way or theres some problem that needs to be addressed. Its that easy.
An app called IRS2Go provides another way to check your refund status. And if youd rather use your phone to find out where your money is, you can call up the IRS Refund Hotline . Note, though, that the IRS receives high call volumes.
Its possible that your refund really is missing, especially if youve recently moved. After youve updated your address online, the IRS can send you a replacement check.
Finding the status of your state tax refund might take a little longer. Youll have to visit the website for your states Department of Revenue. Many states have their own Wheres My Refund tool but some like Massachusetts require you to register before you can figure out where your refund is.
Other Circumstances For Extended Statutes Of Limitations
In some circumstances, the statute of limitations is longer than three years. For example, if you dont report income that youre required to report, and it exceeds 25% of the income shown on that years tax return, the IRS has six years to audit your return.
In addition, not filing or filing a fraudulent tax return allows the IRS to audit you indefinitely. So keep any tax records for those years permanently.
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How Long Should You Keep Business Tax Records
Keep business income tax returns and supporting documents for at least seven years from the tax year of the return. The IRS can audit your return and you can amend your return to claim additional credits for a period that varies from three to seven years from the date you first filed. But its a good idea to use seven years as your guide for keeping these documents.
If you dont file a return at all, the IRS can come after your business at any time.
Examples of supporting documents include:
- profit and loss statements
What Happens If You Were Overpaid
If a recalculation shows you have been overpaid for the GST/HST credit, we will send you a notice to inform you of the amount due. For more information on how to make a payment, go to Payments to the Canada Revenue Agency.
We will keep all future GST/HST credit payments or tax refunds until the balance is repaid. We will also apply your GST/HST credit to amounts owing for tax balances or amounts owing to other federal, provincial, or territorial government programs.
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Unclaimed Federal Tax Refunds
If you are eligible for a federal tax refund and dont file a return, then your refund will go unclaimed. Even if you aren’t required to file a return, it might benefit you to file if:
Federal taxes were withheld from your pay
You qualify for the Earned Income Tax Credit
You may not have filed a tax return because your wages were below the filing requirement. But you can still file a return within three years of the filing deadline to get your refund.
Rrsp As Immediate Tax Relief
Any Canadian who has earned income should file a tax return and start building RRSP contribution room. You can contribute 18% of your earned income from the previous year , and the contribution room carries forward indefinitely. Canadians put money into RRSPs to primarily save for retirement, but the contribution also provides immediate tax relief reducing taxable income by the amount of your contribution.
Youre allowed to contribute to your RRSP in the first 60 days of the calendar year and apply the deduction to your prior years tax return. That gives smart tax planners a window to maximize their tax deductions by making an RRSP contribution during this period. A good rule is to contribute to your RRSP when your income is high say more than $50,000 per year otherwise, it might make sense to prioritize the Tax-Free Savings Account .
For instance, I use TurboTax during the first 60 days of the year to enter all of my prior years tax information and determine how much I owe . If a big tax bill is on the horizon, Ill use an RRSP calculator to determine how much Ill need to contribute to an RRSP to reduce my taxes owing to zero.
Now is a great time to sign up because Wealthsimple is offering Young and Thrifty readers an exclusive deal: get a $100 cash bonus open and fund your first Wealthsimple Invest account .
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Will You Turn 19 Years Of Age Before April 2022
Generally, you have to be 19 years of age or older to get the GST/HST credit.
If you are going to turn 19 years of age before April 2022, make sure that you file your 2020 tax return. The CRA will automatically determine your eligibility for the GST/HST credit and you may start getting it with the first payment after the month of your 19th birthday .
Alex will turn 19 years of age on January 5, 2022. If Alex files a 2020 tax return, they may be eligible for the quarterly GST/HST credit issued in April 2022. Alex will not be eligible for the January 2022 credit, since they will not be 19 years of age before the first day of January 2022.
What Do These Irs Tax Refund Statuses Mean
Both IRS tools will show you one of three messages to explain your tax return status.
- Received: The IRS now has your tax return and is working to process it.
- Approved: The IRS has processed your return and confirmed the amount of your refund, if you’re owed one.
- Sent: Your refund is now on its way to your bank via direct deposit or as a paper check sent to your mailbox.
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How Long Will I Have To Wait For My Federal Refund Check To Arrive
The IRS usually issues tax refunds within three weeks, but some taxpayers have been waiting months to receive their payments. If there are any errors, or if you filed a claim for an earned income tax credit or the child tax credit, the wait could be lengthy. If there is an issue holding up your return, the resolution “depends on how quickly and accurately you respond, and the ability of IRS staff trained and working under social distancing requirements to complete the processing of your return,” according to its website.
The date you get your tax refund also depends on how you filed your return. For example, with refunds going into your bank account via direct deposit, it could take an additional five days for your bank to post the money to your account. This means if it took the IRS the full 21 days to issue your check and your bank five days to post it, you could be waiting a total of 26 days to get your money. If you submitted a tax return by mail, the IRS says it could take six to eight weeks for your tax refund to arrive once it’s been processed.
What You Can Do To Help Us Stop Fraud
If we suspect fraud is being committed against you, we will send you a letter requesting verification of your identification. Please respond to our letter as soon as possible. The quickest way to respond is to visit myVTax and click Respond to Correspondence.
Learn more aboutidentity theft and tax refund fraud, how to detect it, how to avoid it, and how to report it if you believe you are a victim.
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How Long Should You Keep Your Tax Returns
Once you file your taxes, you should plan to keep your tax returns for a minimum of three years from the date you filed your original return.
You can also keep them for two years if you are calculating from the date you paid the tax, whichever comes later. However, if you file a claim for a loss from securities or bad debt deduction, then you should plan to keep your records for at least seven years.
Base Year And Payment Period
The base year is the year of the tax return from which information is taken to calculate the GST/HST credit amount for the payment period.
The payment period is the 12month period during which the GST/HST credits are paid. The payment period runs from July 1 of the year following the base year to June 30 of the next year.
For example, GST/HST credit payments calculated on the 2020 tax return will start being issued in July 2021, which is the beginning of the payment period. For more information, seeWhen will you get your credit?.
The following chart illustrates the link between the base year and the payment period.
Base year and payment period
If the CRA determines that you are eligible for the GST/HST credit based on your 2020 tax return and that you will receive payments, we will send you a GST/HST credit notice in July 2021. It will show how much you will get and what information we used to calculate the amount.
For the payment period from July 2021 to June 2022, we base your credit on both of the following:
- the number of eligible children you have registered for the GST/HST credit
- your adjusted family net income for the 2020 base year
Amir is single with no children. When Amir files their 2020 tax return, the CRA will automatically determine if they are eligible for the GST/HST credit. If Amir is eligible, we will use the information on their 2020 tax return to determine what amount they will get for the payment period starting in July 2021.
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When We Issue A Refund We Will Deliver One Of The Following Messages
- Your return has been processed. A direct deposit of your refund is scheduled to be issued on . If your refund is not credited to your account within 15 days of this date, check with your bank to find out if it has been received. If its been more than 15 days since your direct deposit issue date and you havent received it yet, see Direct deposit troubleshooting tips.
- Your refund check is scheduled to be mailed on . If you have not received your refund within 30 days of this date, call 518-457-5149.
How Can I Get Copies Of My Old Tax Returns
If you have lost or misplaced your old records, then maybe you are wondering how to get a copy of my tax return. If you use a tax software, then you should be able to obtain copies of your prior records from the software on your computer. If you use a CPA for your taxes, then they likely have copies of your old records that they can provide. You can also contact the IRS and obtain copies of your old tax returns. You can order them online, by mail, or over the phone.
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Double Check Your Tax Return Before You File
Double checking your tax return prior to submission can ensure your tax refund is processed quickly. Failure to do so may cause the IRS to delay the processing of your tax refund.
Here is a list of questions to review prior to filing your tax return to ensure the IRS processes your tax refund as quickly as possible.
- Did I review my identifying numbers for myself, spouse and dependents?
- Did I ensure the names on my tax return are spelled correctly?
- Did I review my dependents information?
- Have I reviewed my banks routing and account numbers for accuracy?
- Did I include the correct date of birth for myself and dependents
- Did I electronically sign my tax return ?