Tax season would normally be over by this time of the year, but because of the pandemic, the IRS has extended the tax filing date to May 17. While filing tax returns can always be confusing, the chaos of 2020 may make things a little more complicated this year. Fortunately, you can use this extra time to file your taxes more efficiently. In fact, the IRS just revealed how you can get the most money back on your tax return—so if you haven't filed yet, here's what you should do. Read on for essential financial advice, and for more on money that could be coming your way, The IRS Says You Could Get Money in July, If You Meet This Requirement.
You should file your taxes electronically to get the most money back on your tax return.
On April 20, the IRS revealed that taxpayers should file electronically if they want to maximize their deductions and get the most money back on their taxes. "Filing electronically, whether through IRS Free File or other e-file service providers, is a great way to cut the chances for many tax return mistakes and maximize deductions to reduce tax owed at the same time," the agency said in a statement.
Online tax software will automatically apply the latest tax laws, as well as check for available deductions and accurately calculate refunds based on information provided by taxpayers. Deductions can reduce the amount of your income before calculating the tax you owe, and if you claim certain deductions on your tax return, "you may be able to get a larger refund," the IRS says. And for more from this agency, The IRS Says These People Must Return Their Stimulus Checks.
Filing electronically also helps check for any available credits.
Online tax software will also automatically check for any available credits, the IRS says. This is extremely important this year, as you could be eligible for the new 2020 Recovery Rebate Credit. This credit is available to Americans who did not get the first or second stimulus check, or who got less than the full amount for either check. "File electronically and the tax software will help you figure your 2020 Recovery Rebate Credit," per the IRS. Filing electrically is also the fastest way to get this credit, which will be sent as a tax refund. And for pitfalls to avoid, If You Get an Email From the IRS With These 3 Words, Don't Click on It.
You should also file your taxes electronically if you want your refund to be processed faster.
If you're looking for your tax return to be processed faster, you should also file electronically. According to the IRS, paper returns can take more than twice the same time to process as electronically filed returns—and delays may be even longer because of COVID.
"Note that due to staffing issues related to COVID-19, processing paper tax returns could take much longer than usual," the IRS warns. "Taxpayers and tax professionals are encouraged to file electronically if possible." This also eliminates the possibility that you will mail your paper return to the wrong address, which would result in another processing delay. And for more useful information delivered straight to your inbox, sign up for our daily newsletter.
If you've already filed a paper return, you have to wait for it to be processed.
If you have already filed a paper return, you can't change it and try to file electronically to maximize deductions or check for missed credits, unfortunately. The IRS says they will process your paper return in the order they receive it, and you shouldn't try to file another tax return electronically to get it processed faster. "Do not file a second tax return or call the IRS," the agency warns. And for more on your financial future, This Is How Your Fourth Stimulus Check Would Be Different From the Others.