SOUTHFIELD, Mich. — The second “Tax Day” during this pandemic is fast approaching.
An H & R Block survey found that 56% of Americans have more tax questions than they did last year mainly due to the pandemic – dealing with unemployment benefits and stimulus checks.
So, it’s probably a relief to many that the tax deadline got pushed back until mid-May.
I sat down with two professionals to find out the top five things you need to know.. If you haven’t filed yet.. So you don’t waste your money.
Are your taxes done yet?
Our crew hit the streets of Detroit posing that question.
“I did mine I think mid March,” said Davion Blackwell.
“I did mine back in February like right when we first could file,” Erica Gruenberg replied.
“I think I did it at the end of February – got them like first or second week of March,” Chris Martiass said.
But if you haven’t filed yet, don’t panic.
I consulted a tax professional at H and R Block and a scam expert from the local Better Business Bureau.
Wait, what? Scams? Oh, yeah. Hold that thought.
They shared the five things you need to know if you haven’t filed your tax return yet.
1. TAX RETURNS & PAYMENTS ARE DUE MAY 17
First, your tax returns and income tax payments are due by Monday, May 17, 2021.
“You want to make sure that if you do have a tax due, a balance due, that you get your return filed in on time,” said Jessica Thomas - Senior Tax Research Analyst at the Tax Institute at H & R Block.
Thomas added, ”The penalty is significant for failure to pay any outstanding income taxes by the deadline.”
If you need to file an extension, go for it!
But you’ll still have to pay any money you owe on May 17.
2. THE AMERICAN RESCUE PLAN MAY HELP YOU
Second, the American Rescue Plan – signed into law by President Biden this past March - may help you.
Many who received unemployment benefits last year got a perk.
If your adjusted gross income is below $150,000, the first $10,200 dollars of unemployment benefits you received is not taxable and does not need to be included on your return.
But what if you already filed your 2020 tax return?
Thomas said don’t worry. There’s no need to file an amended return.
“What the IRS is going to do is that they’re going to issue a refund of that over-payment of that unemployment compensation that people might have included on their return if they had already filed,” she explained.
Those tax refunds will start going out this month.
3. UNDERSTAND WHEN TO USE THE RECOVERY REBATE CREDIT
The third thing to remember is to understand when to use the Recovery Rebate Credit – especially when it comes to stimulus payments – or the lack thereof.
“So, maybe you didn’t receive a stimulus, and maybe you think you’re eligible. Maybe you had a baby in 2020. Congratulations!” Thomas said.
Thomas explained that those are a few of examples of when you might be eligible for the Recovery Rebate Credit – that calculation on line 30 of your 1040 -- which could mean more of a refund or, if you have a balance due, it could mean you won’t have to pay as much.
4. BEWARE OF SCAMS
Fourth – beware of tax scams.
“The tax scams are really not scams until you find out your tax return has not been accepted. That’s when you find out that your social security number for the most part has been coopted by a hacker,” said Melanie Duquesnel -- the President and CEO of the Better Business Bureau Serving Eastern Michigan and the U.P. said.
She explained that a scammer can file a tax return using someone else’s social security number, and if that happens to you, contact the IRS immediately.
5. TRACK YOUR RETURN/REFUND
That leads to the fifth thing to know – how to track your tax return or refund.
Duquesnel also said the IRS will also never text or call you or show up at your door.
If you have questions or need help, consult a tax professional.
But watch out for pop-up tax preparers you’ve never seen before setting up in a shopping center.
Ask any tax preparer for their tax preparer identification number, to make sure they’re legit.
You only have 10 more days! Good luck!