Are you eager for your refund from the Internal Revenue Service? Well, the tax filing 2020 season for individual filers will open January 27! The software you use, and some of which you can use for free, may actually let you complete the return and submit before that date. But the IRS won’t start processing these returns until January 27. They more than likely go into some holding area on the tax preparation company’s servers and remain in a holding pattern until IRS officially opens the filing season.
If you do file your taxes before the official January 27 date for the new 2020 season, do not call the IRS because it will be a waste of time since normal electronic processing time takes 21-days. The clock at the Internal Revenue Service doesn’t start ticking until the January 27. Electronic returns are normally processed in 21 days and mailed returns take six weeks.
Remember, if you are doing this on your own computer to make sure the IRS didn’t email saying they were rejecting the return for some reason. They should tell you why but if the return is rejected then you never filed in their eyes. So in this case, you need to fix any problem and resend in order to avoid later delays.
Being the case, now is the time to start getting organized. Gather your income documents since they will start coming in soon. Make sure and double check so you don’t miss any of those documents. The IRS has an area called Automated Underreporter that will eventually find what you miss. It may take a year or two, but you’ll get a letter from them at some point.
Furthermore, you have to ask how large is that refund you hope to receive? IRS has a pay as you go system. Ideally you should get a zero refund and you should owe nothing. That’s hard to do. But you only want to withhold or pay estimated tax payments that are just enough to break even.
The IRS has some great tools online too. For withholding they have the Withholding Calculator. Just put the “withholding calculator” in the search box and it will come up in a search. It’s a good idea to run that periodically. Also, they have the Interactive Tax Assistant too. Just put “ITA” in the search box and that comes up. That’s a nice tool that will take you through a series of questions on tax law topics. And if you are honest if will give an accurate response. Actually if you call 1-800-829-1040 for the IRS, the representative will take you through questions using something similar. I found the ITA tool online to be easier to understand though!
You may find you owe them. Therefore, there is the Online Payment Agreement tool if your balance is $50,000 less than for a long term agreement or $100,000 or less for short term agreements. The balance would have to be assessed though. The IRS has to process refund returns first or they have to pay interest. So if you have a balance you are at the end of the line there. If you need the long term agreement, just look at the direct debit for the installment agreement. They charge a “user fee” on installment agreements and in 2019 that user fee was as low as $31. Possibly the user fees may go up this year.
You could still make payments. You can send in checks or money orders but go electronic. Remember you are paying on the name that is first on the return, the “primary” taxpayer. And if you use IRS Direct Pay right on the Pay Tab on the IRS site that is free. You can use a credit of debit card but you go through different private companies but they charge fees. You can make an electronic payment with the return too. Now if you owe, pay the amount by the due date to avoid interest and penalties.
Hopefully, the information that I provided here will help make it a less painful way to start the tax filing 2020 season.