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Tax Time: From E-File to X Factor

As daylight lingers a little longer each day, it can only mean one thing. Spring is coming! That, and tax season is here. We’d like to take a little of the mystery (and misery?) away from the process of tax preparation by providing you with answers to some of the most frequently asked questions, options for preparing taxes (maybe there is one you haven’t considered before), and a link to a helpful checklist so when you sit down to file, you’ll have everything needed to complete the process.

FAQ

  • When is Tax Day?
    Thursday, April 15, 2021
  • How many people are expected to file electronically?
    90% (fastest way to get a refund)
  • What was the average tax refund as of June 5, 2020?
    $2,769
  • How fast are refunds issued?
    90% of refunds are issued in 21 days or less
  • What is the timetable for a refund with a paper return?
    7 weeks (file electronically!)
  • What is the average time it takes to file your own tax return?
    11 Hours (Save time. Have all of your information in front of you. This checklist can help.)
  • How many taxpayers prepared and e-file their own tax returns in 2020?
    49%
  • Why should I file my taxes early?
    One benefit: filing early can protect against tax fraud
  • What is the ‘Lookback’ rule for taxes?
    The ‘Lookback’ rule, introduced in the December 2020 stimulus bill, can benefit taxpayers who lost a job or experienced a reduction in earned income in 2020 by allowing them to use either their 2019 or 2020 earned income information to get the most out of the Earned Income Credit (EIC) and Additional Child Tax Credit (ACTC).
  • Where can I get the latest tax information including refund status?
    IRS.gov

Don’t have time to read the full article now? Here are our CliffsNotes®:

  1. Save money by filing your own taxes whenever possible – use the free resources provided by the IRS.
  2. Read up on the ‘Lookback’ rule for taxes to see if you are eligible for the Earned Income Credit and Additional Child Tax Credit.
  3. File early and file electronically!

Options for Tax Preparation and Filing

  1. Complete the paper federal and state income tax forms manually and mail. Check this IRS page for information based on your state.
  2. Use online tax software: this article provides some recommendations.
  3. Use IRS Free File
    • If your adjusted gross income (AGI) is $72K or less, Traditional IRS Free File provides free online tax preparation and filing options on IRS partner sites. IRS partners are online tax preparation companies that develop and deliver this service at no cost to qualifying taxpayers.
    • If your adjusted gross income (AGI) is greater than $72K, Free File Fillable Forms are electronic federal tax forms you can fill out and file online for free. If you choose this option, you should know how to prepare your own tax return.
    • Free state returns may also be available. Some IRS Free File Program partner companies offer free state tax preparation. Read company offerings carefully.
    • If you didn’t get the full Economic Impact Payment, you may be eligible to claim the Recovery Rebate Credit using Free File. See Recovery Rebate Credit for more information.
  4. Pay a professional to prepare and file your taxes.

Tax Preparation Checklist

Whether you plan to file your own taxes or utilize a professional, you’ll need to gather the necessary information required to file. Use this H&R Block checklist to simplify the process and save you time and frustration from having to go back and locate additional information.

Don’t leave money on the table when you file. Review the Types of Deductions section on the checklist. Are you claiming all the deductions you’re eligible for?

FinFit offers a variety of financial wellness services and resources, including tools for money management and budgeting, money-saving coupons and financial solutions that can be more affordable than the high cost of credit with other institutions. You can also use FinFit’s tax withholding calculator to help determine if you need to adjust your payroll withholding. Check with your employer to see if they offer FinFit.

Employers: if you don’t currently offer FinFit, what a great benefit to support the financial well-being of your employees!