Did you wake up on April 15 and say to yourself: “OMG! I forgot to file my 2020 taxes!”?
And then did you remember that the filing deadline for 2020 tax returns was moved to May 17?
Such. A. Relief!
Yet May 17 (a Monday) is coming and tax returns are due. If you mail your returns, they must be postmarked no later than midnight that day. If you e-file, you also must file your return on or before May 17.
(And don’t try to squeak by with a 12:01 a.m. May 18 time-stamp. Your e-filed return will be considered late and you may incur a penalty. More on this, below).
Many states also extended their deadline for filing your state returns. Hire Dynamics has several locations in several states and all of the states where we have offices (except Texas, which has no state income tax) also extended their state tax return filing deadline to May 17.
FAQs answered to help you file your 2020 tax returns
- If I don’t owe any in taxes, do I still have to file a return? Even if you had just one employer and filed even one W-4 form with it in 2020, you need to file.
- If I earned income, but it’s such a small amount, do I still have to file? Maybe not. If it falls below the IRS minimum, you don’t have to file. However, that IRS minimum varies depending on your age and whether you’re single, head of household, filing jointly with a spouse, or you can be claimed as a dependent on someone else’s taxes.
- What if it’s really impossible for me to file my tax return by May 17? You can file an IRS tax extension which pushes your filing date back to October 17 (it also must be postmarked by May 17). However – and this is really important – filing an extension doesn’t mean you can extend the time you pay any taxes you owe. If you owe money, it’s still due by May 17.
- What if I file an incorrect or incomplete return? You will need to file an amended tax return. You also should check with your state’s tax website: you may need to file an amended state tax return.
- What happens if I miss the filing deadline and I’m owed a tax refund? Don’t worry: you’ll still get it. You also won’t receive a penalty for filing late. (Note: this could be different for your state taxes–check with your state tax board.)
- What happens if I miss the filing deadline and I owe taxes? If you owe money and you file late, penalties and interest start to accrue on any unpaid tax you owe. You also face a $330 failure-to-file penalty. It’s best to file on time, even if you can’t pay anything, because late-filing penalties often are higher than late tax-payment penalties.
Why it’s really not a good thing if you get a refund each year.
Yes, many of us greatly look forward to receiving a tax refund each year. We often use it for big purchases, vacations and more. In many ways, for some people, it’s become something of a government-run savings program.
But if you get a refund, you’ve basically given the government an interest-free loan. What bank or financial institution do you know that gives you a loan and doesn’t charge interest!?
In addition, by claiming fewer deductions with each paycheck – and therefore having a larger net paycheck amount – you could put the extra into a savings account that pays you money (in the form of interest). In other words, you could put the money to work for yourself!
I don’t want to end up OWING money!
That’s totally understandable.
And there’s an easy way to figure out the “sweet spot” when it comes to deciding the number of withholding exemptions you claim on the W-4. (Note: you can change your withholding exemptions any time you want.)
If you owe money in taxes, it’s probably because you are claiming too many withholding exemptions on that W-4 form. Rest assured: it’s perfectly legal to do this, but you do run the risk of owing taxes if you claim too many exemptions.
As for the “sweet spot” mentioned above, here it is:
- If you’re single, claim 1 deduction (for yourself).
- If you’re married with children, you claim one for you, one for your spouse and one for each of your children.
Are you looking to make more money so that you’ll actually owe taxes next year? (Kidding! But not about making more money.) If so, take a look at Hire Dynamics’ current opportunities and contact the location nearest you.