11 Things to Know Before Filing Taxes This Year

Filing taxes may not be your favorite activity, but it's a necessary task nonetheless. Here are a few things you need to know about filing taxes this season.

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Originally, the IRS set this year's tax-filing deadline as April 15 -- the standard deadline year after year. But recently, the agency changed its tune and moved the filing deadline back a month. Taxes are now due on May 17.

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Just because you get an extra month to tackle your tax return doesn't mean you ought to wait to file. If you're due a refund, the sooner you get your taxes done, the sooner the IRS can process your return and get you your money.

The IRS didn't just move the filing deadline to May 17 -- it's also giving taxpayers extra time to make good on tax debts from 2020. If you owe the IRS money, you don't have to pay until May 17.

Last year, two rounds of stimulus checks went out, and they were generally worth $1,200 and $600 per person, respectively. If you were entitled to a stimulus in 2020 but never got one, you can claim that money on your tax return via the Recovery Rebate Credit.

ALSO READ: The Most Popular Tax Credits and Tax Deductions (How Many Are You Taking?)

Normally, charitable donations are only tax-deductible for filers who itemize on their returns. But for the 2020 tax year, you can deduct up to $300 in charitable contributions even if you're planning to claim the standard deduction.

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Filing electronically can reduce your chances of making an error on your tax return. But more so than that, this year, it's especially important to file your taxes electronically. The IRS is still in the process of wading through a backlog of paper returns from last year, so if you mail in your return, you could delay your tax refund a lot.

If you're owed a refund from the IRS, asking to get it via direct deposit should expedite the process. Just make sure to enter the correct bank account and routing number, because an error on your part could cause delays in getting your money to you.

ALSO READ: Why Uncle Sam Is Keeping My Refund

If you can't complete your tax return by May 17, you can request an extension, which will give you six extra months from the original April 15 filing deadline to get it over to the IRS. That means you'll have until Oct. 15 to submit your return. Keep in mind, however, that you'll still have to pay your tax bill by May 17 if you owe the IRS money from 2020.

If your 2020 income was less than $150,000 and you also collected unemployment last year, thanks to the new coronavirus relief bill, your first $10,200 in benefits is exempt from federal taxes. That could put a nice sum of money back in your pocket.

A lot of people's tax situations got more complicated in 2020. Some filers took withdrawals from their retirement savings under the CARES Act. Others took advantage of low mortgage rates and bought homes. If your financial circumstances changed last year, it could pay to hire a professional to complete your taxes for you.

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If your income is $72,000 or less, you're entitled to file your 2020 taxes for free. You'll get access to online software that does the heavy lifting for you, making the process of filing your taxes easy and smooth.

ALSO READ: Should You File Your Own Taxes This Year?

The more informed you are about taxes, the more likely you'll be to eke out some savings in the course of filing your return. Read up on recent tax changes and see what credits and deductions you're eligible for so you don't miss out on any opportunities you're entitled to.

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