What You Need to Know on IRS Tax Declaration

During the year, taxpayers all over the country face concern about their taxes. The IRS may seem like a threatening entity working against the taxpayer, but in fact there are many resources that the IRS makes available to help taxpayers maintain their status and pay debts. Many people don’t understand they can get free help with their IRS taxes by phone, email, or the Internet. A new tax law came into force in 2018, with several changes that were reflected since the 2019 Tax declaration. With this tax law, less money is taken from your paycheck, a factor for which the refund may be much lower, although there will also be people who have to pay taxes that they did not pay before.

To make everything a little less complex, here are the things you ought to know before starting your annual tax return.

Who should file taxes?

Mostly everyone who works in the United States must file a tax return before July 15, 2020, although there are exceptions and differences, depending on age, status and income.

The deadline for Tax filing the tax return in 2020 was April 15, but it was postponed to July 15 due to delays caused by the corona-virus pandemic.

What documents do you need?

First of all it is of utmost importance that you have on hands your Social Security Number (SSN) or your ITIN number. Then you will be required to have a Form W-2, which is issued by your employer or other earnings statements, such as forms 1099 and 1099-INT, both for independent contractors. It is also very essential that you have an evidence of health insurance coverage, donation receipts, medical and business expenses. And finally, you must determine your marital status.

As for health coverage, it is important you know that California today does not need residents to have health insurance. However, the penalty for not having it is approximately $ 700, and is in effect for your 2018 tax return.

What if I don’t have SSN?

People who do not have or cannot have an SSN as a result of their immigration status should apply for a Personal Taxpayer Identification Number, ITIN, which is an identification number used by the Internal Revenue Service (IRS) for their acronym in English.

This nine digit number will be used to carry out the corresponding tax procedures. To acquire it, you must complete Form W-7. This form will request information that proves that you are a foreigner and also proves your identity.

It is important to mention that the ITIN does not give permission for you to work in the United States nor does it make you a Social Security beneficiary.

Where do I get the tax forms?

There are several options available for you to get the forms; the most practical way is to download them online, although you can also obtain them by calling 1-800-829-3676. Other options for obtaining these forms are through a post office (USPS), at public libraries, and at IRS taxpayer aid centers.

Penalty for lack of health insurance

Starting in 2019, the Shared Responsibility Payment, a federal law that needed people to have a minimum level of medical coverage, ended. However, similar state laws are still in effect in states like Massachusetts, New Jersey, and Washington, DC People who do not have health coverage for more than three months must pay a fine that will be shown on their 2020 tax return.

Residents of the states of Rhode Island, Vermont and California must have medical coverage from 2020 to prevent this fine, which would be reflected in the 2021 tax return. The amount of the fine varies from state to state.

Dependents inside and outside the country

With the preceding tax law, people who had dependents outside or inside the country received a credit of approximately US $ 1,000 each. However, as of 2019 these credits were withdrawn. Under the new tax law that went into effect in 2019, an ITIN parent with citizen children will no longer receive this credit, said Jennifer Rodriguez, who works at the Financial Advisory Window of the Mexican Consulate in Los Angeles.

What forms of payment are available to make my statement?

There are no excuses to pay, since there are several methods to pay your federal taxes. You can do it in a direct payment from a bank account, with a credit or debit card, through the electronic system of federal tax payments, with a check or money order and some states even accept cash payments. Here you can find more information about payment options.

How do I receive my tax refund?

When it comes to filing your taxes, it is very essential to know that people who do it electronically and choose direct deposit receive their taxes before others. You can opt for direct deposit in spite of whether you file on paper or electronically and this way ensures that you will receive your refund in less than 21 days. Additionally, electronic filing reduces return errors and is more secure.

If you think your refund was lost, stolen, or destroyed, you can contact the IRS after 21 days (if you filed electronically) or after six weeks if you mailed it. According to the IRS, the IRS to Go tool will let you know how to contact the federal agency if the case comes up. Here you can find more information about the tax refund.

What happens if I cannot make my taxes on the indicated date?

If you do not make your return on time, you will receive a penalty. However, you can request an extension of time by contacting the IRS, either by phone or through their website. For the season, you may have to wait a long time on the line, but the tax experts revealed that it’s worth the wait.

Be alert; Scams are in full bloom

During this period, the scam attempts increase so you should take necessary precautions and be prepared. If you have any questions about your taxes, you can call the IRS either by phone or you can also search for information on their website and tax declaration.

Keep in mind that the IRS will never contact you by email, text message, or social media. Bearing all these in mind, you have the advantage on avoiding this year’s tax scams.