IRS delays start of tax filing season to Friday, February 12, 2021

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pshonore
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IRS delays start of tax filing season to Friday, February 12, 2021

Post by pshonore »

[Thread merged into here, see below. --admin LadyGeek]

The title says it all. Tha'ts the latest date I can remember. Of course there's nothing to prevent one from completing and filing their return (assuming they have all their info) with HRB, or TT but it will not sent to the IRS until Feb 12. Those receiving EITC or ACTC will probably be waiting until early March for their refunds.
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Re: IRS will start processing returns on Feb 12,2021

Post by Impatience »

They have still yet to acknowledge receipt of an amendment I sent them last ... September. The back-up must be nuts over there right now.
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IRS delays start of tax filing season to Feb. 12

Post by arcticpineapplecorp. »

https://www.cnbc.com/2021/01/15/irs-del ... eb-12.html

IRS delays start of tax filing season to Feb. 12

The IRS is pushing back the beginning of the 2020 tax season to Feb. 12.
Normally, the filing period begins in late January, allowing early birds to submit their returns and get their refunds.
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Re: IRS delays start of tax filing season to Feb. 12

Post by Hyperchicken »

Also announced on IRS official website:

https://www.irs.gov/newsroom/2021-tax-f ... g-pandemic

IR-2021-16, January 15, 2021

WASHINGTON โ€• The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

Side note, reading further down the announcement, I am amazed how large the average refund is.

Last year's average tax refund was more than $2,500.

Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
Last edited by Hyperchicken on Fri Jan 15, 2021 1:23 pm, edited 1 time in total.
BabaWawa
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Re: IRS delays start of tax filing season to Feb. 12

Post by BabaWawa »

Hopefully will allow time for some to get their late stimulus checks. They likely want to avoid overlap of people getting stimulus checks and folks applying the credit instead on their return when they didn't receive a check.
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Re: IRS delays start of tax filing season to Feb. 12

Post by pasadena »

Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
I know a lot of people who absolutely love getting big refunds. Some have a hard time understanding that this is just their money and that they could have used it before if they adjusted their withholdings accordingly. Others understand that, but they enjoy the big check and are ok with forced savings. ๐Ÿคท๐Ÿปโ€โ™€๏ธ
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Re: IRS delays start of tax filing season to Feb. 12

Post by MishkaWorries »

pasadena wrote: โ†‘Fri Jan 15, 2021 1:30 pm
Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
I know a lot of people who absolutely love getting big refunds. Some have a hard time understanding that this is just their money and that they could have used it before if they adjusted their withholdings accordingly. Others understand that, but they enjoy the big check and are ok with forced savings. ๐Ÿคท๐Ÿปโ€โ™€๏ธ
Could it be earned income credits?

I'll be increasing the average refund when I overpay $5000 to get paper I bonds.
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Re: IRS delays start of tax filing season to Feb. 12

Post by whodidntante »

Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm Also announced on IRS official website:

https://www.irs.gov/newsroom/2021-tax-f ... g-pandemic

IR-2021-16, January 15, 2021

WASHINGTON โ€• The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

Side note, reading further down the announcement, I am amazed how large the average refund is.

Last year's average tax refund was more than $2,500.

Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
I tend to facepalm at the thought of people bragging about their large refunds if the reason is their ship has no captain. But a lot of years I get a large refund myself, on purpose. I do large estimated tax payments throughout the year on a credit card to earn sign-up or spending bonuses. That in itself is typically not an overpayment, but it's enough to meet a safe harbor. Then, I'll typically throw in one last payment in shortly before filing to earn another bonus, if there is a good bonus available. It's not difficult to earn a couple grand a year in tax-free income this way, the best bonuses being in the $400 to $1,000 range per card.
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Re: IRS delays start of tax filing season to Feb. 12

Post by vtMaps »

Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm Side note, reading further down the announcement, I am amazed how large the average refund is.
Last year's average tax refund was more than $2,500.
Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
Some bogleheads plan for large refunds which they receive as paper ibonds. --vtMaps
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Re: IRS delays start of tax filing season to Feb. 12

Post by PVW »

Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm
Side note, reading further down the announcement, I am amazed how large the average refund is.

Last year's average tax refund was more than $2,500.

Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
According to the numbers from this Bankrate article, an average refund of $2,500 is the mean refund for those that get a refund.

https://www.bankrate.com/taxes/average-tax-return/
There have been 125.3 million refunds issued totaling $317.7 billion.
A more informative number would be the median refund since high refunds will skew the mean value.

About 26% of returns don't receive a refund.
About 168.7 million tax returns have been filed in the 2020 tax filing season

In any case, I'd guess that refunds are more due to apathy than ignorance. And, compared to the rate on an insured savings account, it's not a big loss to let Uncle Sam hold your savings. Forcing yourself to save some money by allowing too much withholding isn't the worst mistake in the world.
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Re: IRS delays start of tax filing season to Feb. 12

Post by PatrickA5 »

For a lot of people, the tax refund is the largest amount of money they'll receive at one time each year. It's a method of forced savings. With rates nearing zero, I don't see a problem with it. Most would just blow the money anyway.
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Re: IRS delays start of tax filing season to Feb. 12

Post by jebmke »

PatrickA5 wrote: โ†‘Fri Jan 15, 2021 2:51 pm For a lot of people, the tax refund is the largest amount of money they'll receive at one time each year. It's a method of forced savings. With rates nearing zero, I don't see a problem with it. Most would just blow the money anyway.
A lot of people may also get one or more refundable credits and don't have the knowledge or ability to adjust withholding to offset.
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Re: IRS delays start of tax filing season to Feb. 12

Post by EnjoyIt »

Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
As an example of me, I have fluctuating income so I often start the year doing the safe harbor pathway paying 10% extra compared to the previous year. A had a few years where my business deductions were pretty large for the year and I have received substantial refunds. The year the qualified business deduction came out was a 5 figure refund because was not sure how it would play out for me. This year Iโ€™m a expecting about $3k-$4k.

Iโ€™m okay with giving the government the free loan for a few months.
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Re: IRS will start processing returns on Feb 12,2021

Post by ncbill »

I bet both TurboTax & H&R Block will still need to issue updates after that date....
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Re: IRS will start processing returns on Feb 12,2021

Post by Hyperchicken »

Scooter57
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Re: IRS delays start of tax filing season to Feb. 12

Post by Scooter57 »

The problem with large refunds is that you can have a hard time claiming them if someone steals your identity and files for a refund with your info. This happened to a friend of ours. It took a long tome to straighten out. Ever since I have done what I could to pay our quarterly taxes within 95% of what we owe.
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Re: IRS delays start of tax filing season to Feb. 12

Post by protagonist »

MishkaWorries wrote: โ†‘Fri Jan 15, 2021 1:32 pm [

Could it be earned income credits?

I'll be increasing the average refund when I overpay $5000 to get paper I bonds.
I was under the impression that the overpayment had to be in the form of estimated payments, not on the final return....thus I overpaid by at least $5K at the end of 2020.
Is it possible to wait and just overpay by $5K on your final return to get the I-bond refund?
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Re: IRS delays start of tax filing season to Feb. 12

Post by PatrickA5 »

jebmke wrote: โ†‘Fri Jan 15, 2021 3:04 pm
PatrickA5 wrote: โ†‘Fri Jan 15, 2021 2:51 pm For a lot of people, the tax refund is the largest amount of money they'll receive at one time each year. It's a method of forced savings. With rates nearing zero, I don't see a problem with it. Most would just blow the money anyway.
A lot of people may also get one or more refundable credits and don't have the knowledge or ability to adjust withholding to offset.
Right. That was my experience back when I did taxes for a living. Many with Earned Income Credits getting back thousands. These aren't the type of people that would "save and invest" the difference if they could somehow increase their withholdings.
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Re: IRS delays start of tax filing season to Feb. 12

Post by Soon2BXProgrammer »

protagonist wrote: โ†‘Fri Jan 15, 2021 3:33 pm
MishkaWorries wrote: โ†‘Fri Jan 15, 2021 1:32 pm [

Could it be earned income credits?

I'll be increasing the average refund when I overpay $5000 to get paper I bonds.
I was under the impression that the overpayment had to be in the form of estimated payments, not on the final return....thus I overpaid by at least $5K at the end of 2020.
Is it possible to wait and just overpay by $5K on your final return to get the I-bond refund?
you could file an extension, and pay an extra $5k estimated payment at that time... Then wait for your extension to be processed, before filing your return.

This is about the same as making an estimated payment in January and then filing in April.
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Re: IRS delays start of tax filing season to Feb. 12

Post by protagonist »

PVW wrote: โ†‘Fri Jan 15, 2021 2:35 pm
According to the numbers from this Bankrate article, an average refund of $2,500 is the mean refund for those that get a refund.
Doesn't it make sense that many people who paid their estimated taxes in 2020 based on their 2019 income would be owed a large refund due to a decrease in 2020 earnings resulting from the pandemic?
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Re: IRS delays start of tax filing season to Feb. 12

Post by protagonist »

Soon2BXProgrammer wrote: โ†‘Fri Jan 15, 2021 3:35 pm
protagonist wrote: โ†‘Fri Jan 15, 2021 3:33 pm
MishkaWorries wrote: โ†‘Fri Jan 15, 2021 1:32 pm [

Could it be earned income credits?

I'll be increasing the average refund when I overpay $5000 to get paper I bonds.
I was under the impression that the overpayment had to be in the form of estimated payments, not on the final return....thus I overpaid by at least $5K at the end of 2020.
Is it possible to wait and just overpay by $5K on your final return to get the I-bond refund?
you could file an extension, and pay an extra $5k estimated payment at that time... Then wait for your extension to be processed, before filing your return.

This is about the same as making an estimated payment in January and then filing in April.
File for an extension in April, overpay by $5K with your extension, and then file your final return a few days later? Clever.
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Re: IRS delays start of tax filing season to Feb. 12

Post by MishkaWorries »

protagonist wrote: โ†‘Fri Jan 15, 2021 3:33 pm
MishkaWorries wrote: โ†‘Fri Jan 15, 2021 1:32 pm [

Could it be earned income credits?

I'll be increasing the average refund when I overpay $5000 to get paper I bonds.
I was under the impression that the overpayment had to be in the form of estimated payments, not on the final return....thus I overpaid by at least $5K at the end of 2020.
Is it possible to wait and just overpay by $5K on your final return to get the I-bond refund?
Yes. I just learned all about this. I have a thread out their asking if intentionally over paying to get I bonds is OK. It is. viewtopic.php?p=5738284#p5738284

The method I will use IRS Direct Pay to pay an extra $5,000 on my 2020 taxes. It also gives you an automatic extension to file your taxes. Then I'll just do my taxes as usual and apply the $5,000 to I bonds.
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Re: IRS delays start of tax filing season to Feb. 12

Post by jebmke »

protagonist wrote: โ†‘Fri Jan 15, 2021 3:39 pm
PVW wrote: โ†‘Fri Jan 15, 2021 2:35 pm
According to the numbers from this Bankrate article, an average refund of $2,500 is the mean refund for those that get a refund.
Doesn't it make sense that many people who paid their estimated taxes in 2020 based on their 2019 income would be owed a large refund due to a decrease in 2020 earnings resulting from the pandemic?
Article is referring to 2019 returns. They have no idea what 2020refunds will be.
When you discover that you are riding a dead horse, the best strategy is to dismount.
Soon2BXProgrammer
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Re: IRS delays start of tax filing season to Feb. 12

Post by Soon2BXProgrammer »

protagonist wrote: โ†‘Fri Jan 15, 2021 3:42 pm
Soon2BXProgrammer wrote: โ†‘Fri Jan 15, 2021 3:35 pm
protagonist wrote: โ†‘Fri Jan 15, 2021 3:33 pm
MishkaWorries wrote: โ†‘Fri Jan 15, 2021 1:32 pm [

Could it be earned income credits?

I'll be increasing the average refund when I overpay $5000 to get paper I bonds.
I was under the impression that the overpayment had to be in the form of estimated payments, not on the final return....thus I overpaid by at least $5K at the end of 2020.
Is it possible to wait and just overpay by $5K on your final return to get the I-bond refund?
you could file an extension, and pay an extra $5k estimated payment at that time... Then wait for your extension to be processed, before filing your return.

This is about the same as making an estimated payment in January and then filing in April.
File for an extension in April, overpay by $5K with your extension, and then file your final return a few days later? Clever.
I'm not endorsing this, but it should work.

See Harry Sits article from the other day (The Financial Buff or TBF on the forums) https://thefinancebuff.com/overpay-taxe ... -tips.html
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Re: IRS delays start of tax filing season to February 12, 2021

Post by LadyGeek »

I merged pshonore's thread into the ongoing discussion. The software sorts by time, pshonore's post is first. I kept the original thread title (more descriptive) and clarified the date.
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Re: IRS delays start of tax filing season to Friday, February 12, 2021

Post by celia »

I wouldn't be surprised if the tax filing season starts even later than Feb 12, since the new administration wants to talk about another round of stimulus payments. Then, anything could happen.

I wouldn't even take RMDs this year until things settle down. Last year, they ended up not being required, then some people who already took them decided to put them back in their tIRA. It's a rough time for custodians, too.
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Re: IRS delays start of tax filing season to Feb. 12

Post by GerryL »

PatrickA5 wrote: โ†‘Fri Jan 15, 2021 2:51 pm For a lot of people, the tax refund is the largest amount of money they'll receive at one time each year. It's a method of forced savings. With rates nearing zero, I don't see a problem with it. Most would just blow the money anyway.
For people who have never felt the need to be "forced" to save, this seems really sad.
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Re: IRS delays start of tax filing season to Friday, February 12, 2021

Post by dboeger1 »

At least for me, much of the difficulty of setting up accurate withholding has been due to fluctuating income. My wife and I are even salaried employees, yet we changed jobs multiple times and had different periods of employment. I suspect this is not that uncommon nowadays with corporate loyalty essentially being a relic of history.

For years, I got fairly large tax refunds without trying. Then we had one year where I adjusted our withholding down by just 1 measly allowance (this was before the new W4 form, which was supposed to make things easier but still feels ridiculously vague to me). However, our incomes also went up unexpectedly that year, and I figured we would come in right around even, but it turns out we owed a fairly large amount and paid penalties on it. We probably still came out ahead that year just because we were heavily invested and the markets gave great returns, but still, I'd personally much prefer to just pay the right amount in taxes and not have it sneak up on me. I mean, even if it the penalty rates were low enough to be considered low-interest debt, I just wouldn't feel super comfortable doing that, as I consider paying the right amount of taxes an important civic duty.

I honestly have absolutely no clue where we'll fall this year. I just don't see any simple, reliable way to calculate it. The whole W4 system just feels arbitrarily dumbed down to the point of confusion, like someone asking, "On a scale of 1-10, what is your net worth?" It just doesn't make sense. For me to accurately estimate our desired withholding, I'd have to do a deep dive on our tax liability a year in advance, and then estimate whether our per-paycheck withholding was keeping pace. That's before even taking into account raises, bonuses, layoffs, job changes, stimulus checks, dividends, tax code changes, and any number of other unknowns. The fact that anyone manages to get close to the correct withholding seems like unattainable magic to me.
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Re: IRS delays start of tax filing season to Friday, February 12, 2021

Post by scrabbler1 »

I am an early retiree. All of my 2020 income is investment income (some taxable, some not), but I have no taxes withheld and I made no estimated tax payments. Because my net ACA premium subsidy was not large enough (and I did estimate my income very well) compared to what Form 8962 says it should have been, and because I won't be qualifying for the second Stimulus payment using my 2019 tax return's income (but can take it as a credit on my 2020 return), those 2 credits will exceed my 2020 tax liability and generate a refund this time (for the first time in at least 15 years).
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Re: IRS delays start of tax filing season to Feb. 12

Post by Chadnudj »

pasadena wrote: โ†‘Fri Jan 15, 2021 1:30 pm
Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
I know a lot of people who absolutely love getting big refunds. Some have a hard time understanding that this is just their money and that they could have used it before if they adjusted their withholdings accordingly. Others understand that, but they enjoy the big check and are ok with forced savings. ๐Ÿคท๐Ÿปโ€โ™€๏ธ
Hi, that's me. I'm far more likely to do something smart with a tax refund of any size than I am likely to take that amount-divided-by-26 from each paycheck and do that same smart thing with it -- in other words, it's forced savings. The refund check is just a redundant system I've set up to hopefully make sure I use that money wisely (investing, paying down high interest debt, etc.) rather than frittering it away.
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Re: IRS delays start of tax filing season to Friday, February 12, 2021

Post by Not Law »

Earned income credits and child credits can result in refunds in the thousands, even with no withholdings. A decade or so ago, one could file a W-5 and receive a portion of that refund with each pay check. When that was eliminated, tax filers had to wait to receive these amounts as an annual tax refund.
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Re: IRS delays start of tax filing season to Friday, February 12, 2021

Post by rob »

Did anyone else catch the funny message on the IRS website after login... "Down for Maintenance" from Xmas to late Jan... Most maintenance windows went away in the 90's but never seen one that long. They have not processed by 2019 return and I was hoping by registering I could see some status. They had the helpful follow-up items - don't call, don't mail, wait until it's done - nice "service".
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Re: IRS delays start of tax filing season to Friday, February 12, 2021

Post by gcb65 »

The last stimulus package which impacts taxes has to be included. I don't get my final 1099s until then but I try to have everything in my tax software just waiting for the final 1099 to come out.
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Re: IRS delays start of tax filing season to Friday, February 12, 2021

Post by Buford T Justice »

The independent Taxpayer Advocate office at the IRS in its 2020 year end report indicated that as of 12/31/20 the IRS had approximately 9 million unprocessed returns it needed to process as a result of the Covid shutdown. The Campus' / Return processing Service Centers shut down for months... I heard that tractor trailers full of mail were simply parked and labeled with the date the trailer arrived. When return processing started up again, the focus was processing checks / payments


Folks need to e-file, or expect a very long wait.

https://www.irs.gov/newsroom/national-t ... ding-needs
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Re: IRS delays start of tax filing season to Feb. 12

Post by Leesbro63 »

pasadena wrote: โ†‘Fri Jan 15, 2021 1:30 pm
Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
I know a lot of people who absolutely love getting big refunds. Some have a hard time understanding that this is just their money and that they could have used it before if they adjusted their withholdings accordingly. Others understand that, but they enjoy the big check and are ok with forced savings. ๐Ÿคท๐Ÿปโ€โ™€๏ธ
With interest rates close to zero, the argument against big refunds is less. Some folks need/want the forced savings, even though itโ€™s not an optimal way to manage money.
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Re: IRS delays start of tax filing season to Friday, February 12, 2021

Post by jebmke »

Buford T Justice wrote: โ†‘Fri Jan 15, 2021 6:42 pm The independent Taxpayer Advocate office at the IRS in its 2020 year end report indicated that as of 12/31/20 the IRS had approximately 9 million unprocessed returns it needed to process as a result of the Covid shutdown. The Campus' / Return processing Service Centers shut down for months... I heard that tractor trailers full of mail were simply parked and labeled with the date the trailer arrived. When return processing started up again, the focus was processing checks / payments


Folks need to e-file, or expect a very long wait.

https://www.irs.gov/newsroom/national-t ... ding-needs
Saw that report as well. Always e-file unless you can't (some returns cannot); always owe at least a little if you possible can.
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Re: IRS delays start of tax filing season to Friday, February 12, 2021

Post by EllenB »

I called the IRS because I have not yet received my tax refund from October filing. I was informed that the tax mail/processing center completely closed down for several months and are sending the packets of mailed paper returns to other tax centers in hopes that other tax centers have more staffing. Apparently the tax center staff were unable to wear masks and social distance at these tax centers to stay open.
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Re: IRS delays start of tax filing season to Friday, February 12, 2021

Post by Thesaints »

We filed early in July by mail. IRS cashed our check, but return still not processed.
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Re: IRS delays start of tax filing season to Feb. 12

Post by joe8d »

GerryL wrote: โ†‘Fri Jan 15, 2021 4:38 pm
PatrickA5 wrote: โ†‘Fri Jan 15, 2021 2:51 pm For a lot of people, the tax refund is the largest amount of money they'll receive at one time each year. It's a method of forced savings. With rates nearing zero, I don't see a problem with it. Most would just blow the money anyway.
For people who have never felt the need to be "forced" to save, this seems really sad.
I would suspect many of these people are running credit card debt and should adjusted their WH to be able pay That down.
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Re: IRS delays start of tax filing season to Feb. 12

Post by sunny_socal »

pasadena wrote: โ†‘Fri Jan 15, 2021 1:30 pm
Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
I know a lot of people who absolutely love getting big refunds. Some have a hard time understanding that this is just their money and that they could have used it before if they adjusted their withholdings accordingly. Others understand that, but they enjoy the big check and are ok with forced savings. ๐Ÿคท๐Ÿปโ€โ™€๏ธ
Many people think it's "free money." :wink:
neilpilot
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Re: IRS delays start of tax filing season to Feb. 12

Post by neilpilot »

sunny_socal wrote: โ†‘Sat Jan 16, 2021 7:09 am
pasadena wrote: โ†‘Fri Jan 15, 2021 1:30 pm
Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
I know a lot of people who absolutely love getting big refunds. Some have a hard time understanding that this is just their money and that they could have used it before if they adjusted their withholdings accordingly. Others understand that, but they enjoy the big check and are ok with forced savings. ๐Ÿคท๐Ÿปโ€โ™€๏ธ
Many people think it's "free money." :wink:
Actually, there are taxpayers who don't know and sometimes don't care about their actual tax bill. They only consider what they either pay or are refunded at the time that they file. These individuals would rather have $20k withheld and get a $5k refund then have $10k withheld and have to pay another $2k when they file.

Reminds me of a new car buyer who could care less what they pay for a car; they only care about their monthly payments.
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teen persuasion
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Re: IRS delays start of tax filing season to Friday, February 12, 2021

Post by teen persuasion »

Not Law wrote: โ†‘Fri Jan 15, 2021 6:03 pm Earned income credits and child credits can result in refunds in the thousands, even with no withholdings. A decade or so ago, one could file a W-5 and receive a portion of that refund with each pay check. When that was eliminated, tax filers had to wait to receive these amounts as an annual tax refund.
Bingo!

Let's see, we have one dependent currently under 17 ($600 nonrefundable, $1400 refundable), one over 17 ($500 nonrefundable) and in college ($1500 nonrefundable, $1k refundable), retirement Saver's credit ($2k nonrefundable), and EITC for 2 dependents (up to $5828 refundable). So a max of $4600 nonrefundable (mostly goes to waste) and up to a max of $8228 refundable, depending on w2 wages/AGI.

We obviously have withholding at zero.

Refundable credits are used to contribute to Roth IRAs. Years ago, with 5 dependents at home, the refunds (including state) just covered 2 Roth IRAs in full (under 50 then, and CTC was $1k each fully refundable + state 33% CTC match + 30% EITC match).
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F150HD
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Re: IRS delays start of tax filing season to Feb. 12

Post by F150HD »

For a lot of people, the tax refund is the largest amount of money they'll receive at one time each year.
Personally would rather get money back from the IRS then owe money in.

If I owe, and I send in payment and someone forgets to check a little box somewhere, it could become a PITA fixing that. Red tape galore.

If the IRS owes 'me' money, and I don't collect it, I doubt they'd care or even contact me about it.
Mudpuppy
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Re: IRS delays start of tax filing season to Feb. 12

Post by Mudpuppy »

F150HD wrote: โ†‘Sat Jan 16, 2021 11:33 am
For a lot of people, the tax refund is the largest amount of money they'll receive at one time each year.
Personally would rather get money back from the IRS then owe money in.

If I owe, and I send in payment and someone forgets to check a little box somewhere, it could become a PITA fixing that. Red tape galore.

If the IRS owes 'me' money, and I don't collect it, I doubt they'd care or even contact me about it.
They actually do care if you don't properly file a return to prove that you don't owe money. Also, if you meant you'd just ignore it if something went wrong with getting your refund after filing the return, then you will have "fun" when you go to file your taxes the next year, depending on why your refund wasn't processed properly. There is no easy way to avoid the headache that is dealing with the IRS when something goes wrong.

I personally try to get close to the net zero point, but some years I'll end up owing a couple hundred and some years I'll end up paying a couple hundred, depending on how many extra projects I've taken on that year. I don't want to try changing withholdings each year because the Payroll department can be pretty incompetent at times. It took a couple of visits for them to get my current withholdings correct, even though I had them clearly listed on our change request form, because the person processing the form at the time was perplexed by the state withholdings being different than the federal withholdings.

Payroll also once just randomly marked my account as tax exempt in the system, even though I hadn't turned in any paperwork. Best I can figure is someone hit the wrong "exempt" button on processing an extra project payment (which is overtime exempt), since it happened right after the extra project payment was processed. That was a real "peach" to clean up after.
Grt2bOutdoors
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Re: IRS delays start of tax filing season to Feb. 12

Post by Grt2bOutdoors »

whodidntante wrote: โ†‘Fri Jan 15, 2021 1:39 pm
Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm Also announced on IRS official website:

https://www.irs.gov/newsroom/2021-tax-f ... g-pandemic

IR-2021-16, January 15, 2021

WASHINGTON โ€• The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

Side note, reading further down the announcement, I am amazed how large the average refund is.

Last year's average tax refund was more than $2,500.

Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
I tend to facepalm at the thought of people bragging about their large refunds if the reason is their ship has no captain. But a lot of years I get a large refund myself, on purpose. I do large estimated tax payments throughout the year on a credit card to earn sign-up or spending bonuses. That in itself is typically not an overpayment, but it's enough to meet a safe harbor. Then, I'll typically throw in one last payment in shortly before filing to earn another bonus, if there is a good bonus available. It's not difficult to earn a couple grand a year in tax-free income this way, the best bonuses being in the $400 to $1,000 range per card.
Please do explain the mechanics of what you do and how it overcomes the credit charges for card processing.
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wrongfunds
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Re: IRS delays start of tax filing season to Friday, February 12, 2021

Post by wrongfunds »

What are the chances that filing date will also get postponed this year too? I wonder if that will happen in March.
vtMaps
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Re: IRS delays start of tax filing season to Feb. 12

Post by vtMaps »

Grt2bOutdoors wrote: โ†‘Sat Jan 16, 2021 3:51 pm
whodidntante wrote: โ†‘Fri Jan 15, 2021 1:39 pm I do large estimated tax payments throughout the year on a credit card to earn sign-up or spending bonuses. That in itself is typically not an overpayment, but it's enough to meet a safe harbor. Then, I'll typically throw in one last payment in shortly before filing to earn another bonus, if there is a good bonus available. It's not difficult to earn a couple grand a year in tax-free income this way, the best bonuses being in the $400 to $1,000 range per card.
Please do explain the mechanics of what you do and how it overcomes the credit charges for card processing.
He did explain... He opens new lines of credit and is rewarded with sign-up or spending bonuses.
--vtMaps
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dfw_north
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Re: IRS delays start of tax filing season to Feb. 12

Post by dfw_north »

whodidntante wrote: โ†‘Fri Jan 15, 2021 1:39 pm
Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm Also announced on IRS official website:

https://www.irs.gov/newsroom/2021-tax-f ... g-pandemic

IR-2021-16, January 15, 2021

WASHINGTON โ€• The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

Side note, reading further down the announcement, I am amazed how large the average refund is.

Last year's average tax refund was more than $2,500.

Are people facing vastly fluctuating income and other tax circumstances, or is this a failure to plan the withholdings correctly?
I tend to facepalm at the thought of people bragging about their large refunds if the reason is their ship has no captain. But a lot of years I get a large refund myself, on purpose. I do large estimated tax payments throughout the year on a credit card to earn sign-up or spending bonuses. That in itself is typically not an overpayment, but it's enough to meet a safe harbor. Then, I'll typically throw in one last payment in shortly before filing to earn another bonus, if there is a good bonus available. It's not difficult to earn a couple grand a year in tax-free income this way, the best bonuses being in the $400 to $1,000 range per card.

But there is a processing fee of about 2%. How do you make money, unless you apply for a new CC every tax filing season and get a bonus..

https://www.irs.gov/payments/pay-your-t ... redit-card

Thanks,
egrets
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Re: IRS delays start of tax filing season to Feb. 12

Post by egrets »

Hyperchicken wrote: โ†‘Fri Jan 15, 2021 1:19 pm Also announced on IRS official website:

https://www.irs.gov/newsroom/2021-tax-f ... g-pandemic

IR-2021-16, January 15, 2021

WASHINGTON โ€• The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.
What? I had no idea I couldn't mail stuff in Jan 2 if I had all the information, which I do, plus the set of tax forms. Are we supposed to wait until Feb 12th and then download new copies of forms? So much for all my number crunching last week.
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F150HD
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Re: IRS delays start of tax filing season to Feb. 12

Post by F150HD »

Mudpuppy wrote: โ†‘Sat Jan 16, 2021 3:46 pm
F150HD wrote: โ†‘Sat Jan 16, 2021 11:33 am
For a lot of people, the tax refund is the largest amount of money they'll receive at one time each year.
Personally would rather get money back from the IRS then owe money in.

If I owe, and I send in payment and someone forgets to check a little box somewhere, it could become a PITA fixing that. Red tape galore.

If the IRS owes 'me' money, and I don't collect it, I doubt they'd care or even contact me about it.
They actually do care if you don't properly file a return to prove that you don't owe money. Also, if you meant you'd just ignore it if something went wrong with getting your refund after filing the return, then you will have "fun" when you go to file your taxes the next year, depending on why your refund wasn't processed properly. There is no easy way to avoid the headache that is dealing with the IRS when something goes wrong.

I personally try to get close to the net zero point,...
not talking about improperly filed taxes, something 'going wrong', not filing taxes or 'ignoring' something. Its implicit in my comment that one is filing correctly.
Also, like most I have any refund go directly to a bank account, I did not state that above as to me at least, that is somewhat implicit in filing (though maybe some don't do that, I dont)
net of 0 is good option, but otherwise would rather get $$ back then pay in if possible.
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