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When Will I Get My Tax Refund Back?

For any taxpayer filing early, the question is when can they expect to see their tax refund. A lot of Americans rely on their annual tax fund to cover a range of expenses.

When will I get my tax refund back?

In the beginning, it was nearly impossible to predict because you had to mail in your return and then wait for the Treasury to issue a check, once everything had been plugged into a computer. But e-filing changed all that.

With an online e-filing service, you may be able to get your tax refund back in just eight days, especially if you opt to receive it through direct deposit.

Last year, the IRS said they managed to provide tax refunds to 90% of taxpayers in 21 days or less.

The New Tax Refund Schedule Dates

For this year, the official start date has not yet been announced by the IRS. The IRS never keeps an official calendar, but they regularly provide an estimated tax refund schedule that says the majority of filers will receive their money in 21 days or less, from the date their return is received.

But if you’re using tax preparation software you likely already know that you can file much earlier. Often, taxpayers are able to file months earlier. Most of these programs will hold your return until the IRS opens the e-filing system.

If you still decide to mail in your tax return, you can legally do this from January 1st, but you should expect to wait at least 6-8 weeks to actually receive your refund.

Some of the most highly recommended tax software companies are now offering free and paid editions for online tax filing. You’ll pay nothing to file your federal and state taxes if you have a simple tax return.

Start by easily importing your W-2, answer simple questions about your life, and you’ll get you your maximum refund, guaranteed!

Your Refund May Be Delayed by Law

Congress passed a law that states the IRS must withhold tax refunds from taxpayers if they’re claiming either the Earned Income Tax Credit or the Additional Child Tax Credit. This applies no matter when you decide to file your return.

Last year, the delay was mandated to be until February 15th. So you wouldn’t have received your refund before this date no matter when you sent in your tax return. The IRS then said they wouldn’t actually issue refunds until February 25th.

The philosophy behind this delay was to reduce tax fraud and give the IRS more time to ensure that no duplicate returns have been filed. For taxpayers, though, they do need to deal with with the fact the IRS will withhold the full refund, rather than just the refund coming from these two tax credits.

It’s expected these delays will continue for the foreseeable future. This year the fastest way to get your tax refund back is with online tax filing.

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When Can I File My Taxes?

Are You Wondering When Can You File Taxes in 2020?

Now, anyone can get started with early online tax filing and get a head-start on their tax refund. TurboTax and H&R Block will both securely hold and then submit customers’ tax return to the IRS as soon as they begin accepting returns. There is no faster way for taxpayers to get their tax refunds!

1. If you file your taxes online you can easily prepare and file your own taxes. Online software offers advanced tools to help you file your taxes and pay the least amount possible. They also provide extremely fast refunds.

How Soon Can I File Taxes?

first day when can you file taxes

The first day to file taxes with the IRS usually starts on Jan 15. However, you can get started at anytime with online tax filing and get your refund back as fast as possible.

The reason why taxpayers won’t be able to submit their returns until the end of January is because the IRS has been testing its security systems and stress testing their tax processing systems in readiness for the tax season ahead. They also want to assess the impact of the latest legislation on the tax returns submitted.

As part of the Security Summit initiative, the IRS has been working closely with tax industry professionals and state revenue departments in an attempt to combat identity theft for taxpayers during this tax season.

Deadline for Filing Taxes

The filing deadline for 2020 will most likely be April 18th.

The IRS website also has a wide variety of tools and information available that can make preparing taxes easier. In addition, it is recommended that you e-file and chose direct deposit as the way to receive your refund. This ensures you keep your information safe, your return is accurate, and that you receive your refund in the fastest amount of time.

Once again, the IRS has projected that nine out of ten returns will receive their refunds in less than 21 days. If you qualify, you should also take advantage of free tax options available. You can go to the IRS.gov to the “filing” tab to see what options may be available to you.

Additional Tax Filing Facts to Keep in Mind

  • 70% of taxpayers are eligible to file their taxes via IRS Free File. Other commercial partners of the IRS offer free brand name software to 100 million individuals and families who make less than $62,000.
  • Online tax forms allow you to have electronic versions of IRS paper forms regardless of your income. They can be prepared and filed by you if you are comfortable preparing your own income taxes.
  • VITA and TCE provide free tax help to those who qualify. You can learn more about them by going to the IRS website and entering “free tax prep” in the search box. Alternatively, you can download the IRS2Go mobile app on your phone and find a free tax prep provider that way.

Tips for Filing Your Taxes

  • Organize – Make sure that you have everything that you need before you even begin working on your returns.
  • E-File – E-filing comes with so many benefits such as ease of use, quickness of filing, and identity protection.
  • Sign Up For Direct Deposit – If you want to receive your tax refund in the quickest amount of time, you need to sign up to have it direct deposited.
  • Ask Questions if Needed – If you are unsure about something ask questions. It is always better to be safe than sorry.

How to Get a Fast Tax Refund

When 2020 rolls in you can start preparing your tax return online. Once you have it completed, you will be among the first of taxpayers who have their returns processed and their refunds issued.

Keep in mind when you file your taxes with TurboTax or H&R Block the process is easy. They provide you with the largest refund possible by insuring that they ask the correct questions to find out which deductions and credits you qualify for.

You can also use their free tax refund calculators to see how much your tax refund will be. When you file your taxes online there is no way that, you can go wrong and many taxpayers are able to file their federal tax returns free or at a discount.

What to Do if You Have Not Received Your W-2

You need a w-2 form when you file a tax return

Before you can file your tax return, you have to have all of the documents needed, including your W-2. All of your employers are responsible for sending you this yet they do have until February 2nd to do so. In the event that you have not received your W-2 yet, you can follow these steps.

Contact Your Employer – If you have not received your W-2 yet, you need to contact your employer to see when they put it in the mail. It is possible that it was returned to them due to incorrect mailing details. Once you have contacted them and found out the status give it a reasonable amount of time for your W-2 to arrive.

Contact The IRS – If you have not received your W-2 after February 14th, it is time to call the IRS at 800-829-1040 for assistance. When calling make sure you have your name, address, social security number and phone number. Additionally, you will need your employer’s name, address, phone number, your employment date, the estimate wages earned from them during the year and estimated federal income tax that was withheld. To make an estimation you should refer to your most recent pay stub.

File Your Return – Even if you do not have your W-2, the IRS expects you to file by April 18, or request an extension. You can use Form 4852 Substitute for Form w-2, Wage and Tax Statement. This form should be attached to your return, however, keep in mind your refund may be delayed since the IRS has to verify your information.

File Form 1040X – If you receive your W-2 after you have filed your taxes, you must amend your return by filing Form 1040X Amended U.S. Individual Income Tax Return.

To ensure that you receive the maximum refund possible it is suggested that you file your taxes using online software. It makes filing taxes easy and when filing your taxes electronically your tax refund can be returned to you sooner.

Filing Your Taxes Online

Remember, when you file your taxes online, you don’t need to know which schedules to fill out. We’ll ask you simple questions about your life and put your answers on all the appropriate tax forms.

You’ll get step-by-step instructions through your taxes, expert help when you need it and every deduction and credit that applies to you. We make sure you get the biggest refund possible. Try the Free tax refund calculator to see your how much money you’ll be getting back.

Video – How to File Your Taxes Online

 

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Child Tax Credit Eligibility

Do you have children or any other dependents in your household? Then the chances are you’ll be eligible to claim the Child Tax Credit.

child tax credit eligibility

For the new tax year, this credit is worth up to $2,000. If you qualify, it will reduce your overall income tax bill due to the Federal government.

You may have already claimed this credit in the past, but for this year there are some major changes as a result of the tax overhaul initiated at the end of 2017 by the Trump administration. Taxpayers must be aware of these eligibility rules, so they don’t incorrectly claim the credit or miss out on what they deserve.

What is the Child Tax Credit?

The idea behind the Child Tax Credit (CTC) is to help parents and guardians by giving them an extra boost to their income. This tax credit is for any child who’s under the age of 17 and is worth $2,000. However, the amount you can get is determined by how much you earn.

This is a credit aimed at working parents, so you must have a minimum of $2,500 in earned income in order to qualify. For single filers, the credit begins to phase out at $200,000. For joint filers they will see the credit phase out at $400,000.

Remember, these tax credits reduce the amount you owe on your Federal tax credits.

If you owe $5,000 to the Federal government at the end of the tax year and you qualify for $4,000 in tax credits because you have two children, you would only need to pay $1,000 this tax year.

To make things even better for parents, these tax credits are refundable up to a maximum of $1,400. So if you owe nothing, you could get up to $1,400 paid directly to you.

What has Changed for Taxpayers?

President Donald Trump confirmed his flagship tax overhaul in 2017 known as the Tax Cuts and Jobs Act (TCJA), which has now come into force for the upcoming tax year. This brought a number of changes to the US tax code. Some of these changes also impacted the CTC.

Here are some of the big changes you need to take into account.

  • The credit for each child was doubled to $2,000.
  • Part of the CTC ($1,400) is now refundable. The credit wasn’t refundable before.
  • All children must possess a Social Security Number.
  • Parents must have an earned income of at least $2,500.
  • The phase-out threshold was increased from $75,000 to $200,000 for single filers and from $110,000 to $400,000 for those filing jointly.
  • Non-child dependents are now worth $500 in tax credits. These are not refundable.

The other big alteration was the TCJA removed the Additional Child Care Tax Credit and combined it with the current version of the CTC. That was the reasoning behind increasing the CTC limits and making it partially refundable.

Which Dependents Can You Claim the CTC on?

There are a range of tests to determine whether a dependent can be claimed as part of the CTC. The IRS uses six tests to decide if someone counts as a dependent.

Test One – The child must be under the age of 17 by the conclusion of the current tax year.

Test Two – The child must be a direct descendant, stepchild, half sibling, sibling, or an adopted child. The child can also be the direct descendant of any of the above, which includes grandchildren and nephews.

Test Three – The child can’t provide half of their own financial support, which is the money used for their living expenses. They also can’t file a joint return if you’re claiming them as a dependent.

Test Four – Taxpayers must claim the child as a dependent on their tax returns.

Test Five – Are they a citizen or resident alien of the US? They must also possess a Social Security Number when claimed as a dependent.

Test Six – The child must live with the taxpayer claiming them as a dependent for half of the tax year in question.

If the dependent passes all of these tests, you can claim them as a dependent and they’re eligible for the CTC.

Income Limits for the CTC

There are income limits that apply to everyone attempting to claim the CTC. For a start, anyone claiming the credit must have an earned income of $2,500 or more for the current tax year. The credit also phases out as your Adjusted Gross Income (AGI) goes up.

So when you cross a certain income threshold the credit begins to phase out and you can only claim part of the credit. The TCJA, however, ensured that most Americans will be able to claim the full credit.

For the new tax year, the CTC begins to phase out at the $200,000 income limit for single filers and $400,000 for joint filers. The credit disappears completely for single filers at $240,000 and $440,000 for those filing jointly.

How to Claim the CTC

When you prepare your taxes online you are automatically asked the right questions to determine if you qualify and how much you get back in taxes for a child.

The CTC is claimed through Form 1040, via line 12a. If you’re filing Form 1040NR, you’ll find the CTC on line 49.

Try the Dependents Tax Credit Calculator

tax credit calculator

The Dependents Tax Credit Calculator will give you an accurate view of how much you could be entitled to. Just answer some simple questions regarding your income and your living circumstances and you’ll get a readout on how much you may be eligible for.

The IRS also offers a child tax credit worksheet on its website for anyone who needs to work out how much the CTC is worth to them for this tax year.

If you want to claim the CTC for previous years, this can be done through Forms 1040, 1040A, and 1040NR.

How Much of the CTC Can Be Refunded?

The CTC has become a refundable tax credit for the first time. It’s now possible to claim $1,400 of the total $2,000 tax credit as a refund. So if your bill from the Federal government is $0 you can potentially receive a $1,400 refund for every dependent who qualifies.

The $1,400 refund limit will increase every year as it’s indexed to the current inflation rate.

But the TCJA has also capped the amount of the CTC that’s refundable to your earned income. The refundable part of the CTC can’t be more than 15% of your total earned income. You would need an earned income of $11,830 to claim the full $1,400.

What Happened to the ACTC?

The ACTC was formerly used by taxpayers to claim what’s now the refund from the CTC. The CTC was used to reduce your Federal tax bill, with the ACTC offering the refund.

From the 2018 tax year onwards, the ACTC has been phased out. However, it can still be claimed through Form 1040 if you need to file for previous tax years.

Credit for Other Dependents (ODC)

The ODC is a brand-new credit you can claim if you have other dependents who don’t qualify for the CTC. This is worth $500 for each one.

The tests are mainly the same. You may claim the ODC for other dependents, such as a disabled adult or an elderly relative.

The Child and Dependent Care Tax Credit (CDCTC)

The Child and Dependent Care Tax Credit is often confused with the Child Tax Credit, but it’s not the same credit. You can take this credit if you had a minimum earned income amount for this tax year and you’re paying for the care costs of a dependent.

You can claim this credit if you’re a godparent, caring for elderly parents, or paying for the care of disabled relatives.

To qualify, dependents must be:

  • 12 or under, in the case of children, when the tax year ends.
  • An adult family member or spouse who isn’t able to cover their own care needs due to physical or mental disabilities. These dependents must have a gross income of $4,150 or less.

The CDCTC can be used to claim back qualified care expenses up to 35% of the total cost. The percentage you can deduct, again, depends on how much you earned during the tax year.

The credit can be applied to care expenses of $3,000 for a single dependent or $6,000 for more dependents. The biggest credit amount you can claim is $1,050 for a single dependent and $2,100 if you have more than one dependent.

This is not a refundable tax credit and must be used for expenses involving care while you work (or are looking for work) or household services.

The CDCTC doesn’t include child support.

Use Form 2441 if you’re eligible to claim this tax credit.

What about State Child Tax Credits?

Certain states also have the above credits at the state level. They usually partially match or fully match the Federal versions of these tax credits.

Depending on the state, they may also be refundable.

You should check out whether your state offers these credits and how much they’re worth.

What You Should Take from this Guide

The IRS provides help to parents and guardians when they want to raise a family. They also provide support to people who are caring for other dependents. Parents should be claiming the CTC because most Americans are now eligible for the full credit. For those with low tax bills, it’s possible to get a tax refund out of it.

best free online tax filing

To make sure you’re claiming these tax credits correctly, you should consider using online tax filing. That way everything can be taken into account and you can avoid overpaying the Federal government or leaving money on the table.

Do everything you can to reduce your tax bill by claiming credits and deductions. Try to take everything you’re eligible for. Many taxpayers make the mistake of failing to apply for every credit and deduction they’re eligible for.

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Online Self-Employment Tax Calculator

self employment taxJoining the ranks of the self-employed is a dream for so many. But that freedom comes with a certain cost.

Taxes become more complex when you decide to become self-employed. The self-employment tax is your single biggest concern. Today, the self-employment tax is set at 15.3%.

We’re going to show you what you need to know about the self-employment tax. You’re going to learn about how it works, how to calculate it, and how to deduct as much of it as you possibly can.

Self-Employment Tax – What is It?

The self-employment tax consists of two parts. You’re essentially paying for both Medicare and Social Security, which collectively makes up 15.3% of your total earnings.

Remember that if you’re self-employed you also need to pay both self-employment taxes and income taxes.

You can’t avoid paying for Social Security and Medicare. Every earner in the country must pay them, whether you’re self-employed or work as a salaried employee.

The difference is that when you’re an employee your boss pays half of those taxes. When you’re self-employed you must pay the taxes in full.

How Much Do You Have to Pay Towards Social Security?

Social Security makes up 12.4% of the self-employment tax. You must pay Social Security taxes on earned income up to $128,400 in 2018, but in 2019 this is going to jump up to $132,900.

This applies to all earned income, rather than just income you earn from being self-employed. Anything earned above $132,900 in 2019 won’t be taxed for the purposes of Social Security.

How Much Do You Have to Pay Towards Medicare?

The tax rate for Medicare is 2.9%. The difference is there’s no earning limit. On the contrary, once you earn over a certain amount you get hit by an additional tax of 0.9%.

You’ll qualify for the additional tax if you earn more than $200,000 as a single filer or $250,000 for someone who’s married and filing jointly.

This means that if you cross this threshold your Medicare tax is 3.8% on anything above that threshold.

You can find out more about the Additional Medicare tax by visiting the IRS website.

Do You Need to Pay Self-Employment Taxes?

The chances are you do. You’re considered to be self-employed, in the eyes of the IRS, if you happen to be a sole proprietor, an independent contractor, or part of a partnership.

Also, if you happen to be a salaried employee with a side gig, you may need to pay self-employment taxes on the earnings from your side hustle.

Just remember that self-employment taxes aren’t withheld automatically by the IRS. You may also need to make quarterly self-employment tax payments if you have more than $1,000 due on your tax return when filing.

Visit the IRS website to find out more about how  work.

How to Calculate Your Self-Employment Tax

self employed calculator

Try using the self-employment calculator to see how much you can increase your tax savings by applying your estimated self-employed business expenses.

Here are some common self-employed business expenses you can enter into the calculator:

  • office space rental
  • business travel
  • meals & entertainment
  • mobile phone & accessories
  • training courses
  • association membership fees
  • business equipment
  • business licenses & permits
  • office supplies
  • marketing expenses
  • accounting & legal fees
  • car repairs & maintenance

How to Calculate Your Self-Employment Tax Manually

You’ll need to use Form 1040 to file your taxes. This is the individual income tax return and you’ll be using both Form 1040 and Schedule SE. Together, this will calculate how much you owe in self-employment taxes.

This form is used to show how much you’ve earned and how much you owe. You won’t perform the actual calculations here.

1 – Decide How Much of Your Earnings is Taxable

For the purposes of the example, we’re going to assume that you earned $100,000 through your self-employment.

The IRS says that most of your earnings would be subject to self-employment taxes. You should multiply your earnings by .9235 to get your taxable earnings.

In this case, this comes to $92,350.

So why is this amount of your earnings taxable? This calculation considers a 7.65% deduction for the employer half of your FICA taxes. The business can deduct this because you’re treated as an employee.

Someone who’s self-employed is always able to deduct this amount.

2 – How Much Do You Owe to the IRS?

The third step is to multiply your taxable income by 15.3%. In this case, you’re multiplying $92,350 by 15.3% to get $14,129.55.

This is how much you owe to the IRS in self-employment taxes. Write down the whole self-employment tax amount under the section labelled ‘Other Taxes’ on Form 1040.

3 – Report Your Self-Employment Tax in the Right Way

The final step is to report half of your self-employment taxes as a gross income adjustment. This will allow you to reduce your income taxes.

In the view of the IRS, they consider this to be the part of the self-employment tax paid by the employer.

If we go back to our figure of $14,129.55, we can cut that in half and report $7,064.78 as an income adjustment.

It’s really that easy to calculate self-employment taxes. Just make sure you double-check your calculations to ensure you don’t make a mistake and inadvertently get audited!

File Your Taxes Online and Get The Most Deductions

Online tax filing is developed with do-it-yourself filers in mind. We guide you step by step with simple, plain-English questions and apply the appropriate tax laws in the background.

We also do the math and fill in all the right tax forms. We will even recommend the best choices for you when it comes to filing status, deductions and credits, and other areas that affect your taxes.

Plus, we check your return for errors and tell you how to fix them. And if you’re ever unsure of an answer, or need some expert advice on your taxes, you can talk one-on-one with one of our highly-skilled tax professionals for free.

They even have a free tax refund calculator available that allows you to know the amount of money that you will be getting back in your tax refund. Their online filing services has the ability to import your W2 information into your tax return so you can avoid worrying about your forms being delivered via snail mail.

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What is the Social Security Tax Rate & Limit

Anyone with a job will see a Social Security tax added to their paychecks. This payroll tax amounts to 6.2% of whatever you earned. The money goes directly towards funding the Social Security program.

social security

Self-employed individuals pay double this amount because they must cover both the employee and employer parts of the tax. However, half of this tax is deductible.

The Social Security Wage Base is the threshold on income. Anything you earn above this threshold isn’t eligible for Social Security tax. It rises nearly every year.

What You Need to Know About the Social Security Tax Rate and Limit

If you earned more than $132,900 in 2019, you wouldn’t have to pay any tax on the income above this limit. The Social Security Wage Base means that you’ll only ever pay Social Security taxes on $132,900 and nothing else. You can’t pay more than $8,240 in taxes for Social Security in 2019.

The cutoff in 2018 was $128,400.

Be aware that this doesn’t apply to the 1.45% Medicare tax. You’ll have to pay Medicare taxes on every dollar you earn.

If you earn more than $200,000, or $250,000 as married couple but filing jointly, you’ll need to pay an Additional Medicare Tax, which brings the total percentage to 2.35%.

What You Need to Know About the Social Security Tax

The Social Security tax is a contribution to the overall Social Security system. This ensures that you’ll receive Social Security payments when you reach retirement age. As an employee, your employer will match what you contribute dollar for dollar.

The idea behind it is that you pay to support the retirees of today, and the next generation will subsequently fund your retirement. The philosophy behind it is to create a self-sustaining retirement plan.

On your paycheck you may see something called FICA. This stands for the Federal Insurance Contributions Act and this is the act that Medicare and Social Security is taxed under.

This is also why your Social Security payments are higher when you delay claiming your benefits. The longer you pay the tax the more you receive when the time comes for you to retire.

Working longer is also beneficial for retirees because it means vital extra years of income.

What are the Changes to Social Security?

The Social Security Administration (SSA) is responsible for managing the Social Security program. They have made a few changes to the way the system works.

The big change is that retirement benefits have increased by 2.8%, as a result of adjustments to the standard cost of living. Usually, this is judged by the Consumer Price Index (CPI).

The earning limits for retirement payments have also increased in 2019. This earning limit applies for people who receive Social Security benefits yet continue to work.

For anyone who hasn’t yet reached the full retirement age, the earning limit has been increased by $600 to $17,640 for 2019. If you earn more than this amount, you lose $1 in benefits for every $2 you earn.

The earning limit for those who have reached full retirement age has been increased to $46,920 for 2019. Take note that this limit only applies to any income you generate throughout the months before you officially reach full retirement age.

Exceed this limit and you lose $1 in benefits for every $3 you earn above the limit.

There’s no penalty for working and receiving Social Security benefits after you reach full retirement age.

It’s Simple to Understand

There are serious concerns regarding the depletion of the program’s funds. But Social Security is simple enough for the average person to understand.

You pay in throughout your working life and, in theory, you get benefits when you reach full retirement age.

The income limit for 2019 is $132,900, so anything you earn above this limit won’t be taxed for Social Security purposes.