2020 Tax Refund
Are you one of the many Americans who may still be owed money from your 2020 tax returns? You should thank the American Rescue Plan Act because individuals who received unemployment benefits could exclude their taxable income up to $10,200 for single filers and double for couples if they earned less than $150,000. However, this change happened after many Americans had already filed their taxes, and the IRS said that they will make necessary corrections.
The good news is that the IRS recently said they had finished their necessary corrections about the changes. However, if you believe you’re still owed money from IRS, you’ll need to file an amended return using the 1040-X form. Unfortunately, this form is not intuitive, and most people will need to pay someone to help them or buy additional software to figure it out according to Ryan Losi, executive vice president at certified public accounting firm PIASCIK in a statement at the USA Today website. Additionally, amended returns must still go through the old IRS manual process, even if they are filed electronically, which means it will take a few months to get a refund if you owed one, and if there are no problems come along the way.
To find out if you’re owed money, check your 2020 tax return to see if you included the unemployment compensation exclusion on your 1040. If you didn’t enter an exclusion and received jobless benefits, you could try to calculate what you might have overpaid using the IRS’ unemployment compensation exclusion worksheet for 2020 only according to IRS. However, it might be hard to tell how much the unemployment exclusion would affect your federal and state returns, so it’s best to consider taking your return to a professional for a look.
It’s essential to file as early as possible, as amended returns must be filed within three years after the date you filed your original return or within two years after the date you paid the tax, whichever is later, according to the IRS. Plus, tax preparers like Jackson Hewitt offer free “lookbacks,” where a tax preparer reviews up to three years of past returns to see if anything was missed. However, it’s important to note that amended returns can’t be filed via IRS free file, and fees for amending returns vary depending on location and how complicated the return is.
It’s worth checking if you’re owed money from your 2020 tax returns, especially since the average refund for those who were corrected by the IRS was $1,232. While it may take some effort and cost money to file an amended return, filing as early as possible and seeking the help of a professional can ensure you get the money owed to you. Don’t miss out on what’s rightfully yours – check if the IRS still owes you money today.