Few people enjoy having to file taxes. But did you know that this necessary task of American life can be a big help during times of crisis? Not sure how? Consider three valuable ways that filing your taxes can help you make it through the pandemic and recession of 2020.
1. Economic Impact Payments
To help Americans of all sorts keep themselves afloat during layoffs and mandatory business closures, a one-time payment of $1,200 per adult ($500 per child) was authorized for most Americans.
The easiest way to receive your economic impact payment as soon as possible is to file your 2018 or 2019 income taxes and supply direct deposit information if possible. If you follow this route, your economic impact payment should come automatically. If you're hesitant about how to file your tax forms, seek out professional assistance to get this job done and put yourself in line for your payment.
2. Tax Refunds
Millions of dollars of tax refund money are left on the table each year. This unclaimed money comes from individuals and businesses who fail to file their tax forms. Such missing refunds usually consist of one of two categories. The first is withholding money you have sent to the IRS and could receive back because you don't actually owe it. The second is refundable tax credits that you deserve but fail to file a form to claim.
3. Qualifications for Other Things
If your actual tax filing doesn't result in a refund, it can still help you secure other money. Recessions usually come with a reduction in mortgage loan rates, for instance. If you refinance a mortgage while rates are low, you can save hundreds of dollars per month. But you will likely need your tax returns in order to qualify.
You may also need those tax forms to qualify for public benefits such as subsidized health insurance coverage through your state's marketplace or low-income programs and housing. And programs that have their own income-based application process may require backup documentation such as income tax returns or information that you would ordinarily glean from using a completed return as a basis.
Clearly, filing your income taxes can have a profound impact on your bottom line. If you haven't filed for 2019 yet or have questions about how 2020 taxes will affect you, start by consulting with an accountant offering income tax services in your area. With a little time investment, you could put yourself and your family on the road to a more financially stable year.
If you're a business owner and you don't have an accountant, you might want to consider hiring one. Accountants help business owners by handling the books, filing tax forms and managing the costs of the business. They also offer guidance to concerning important business matters. We aren't accountants, but we do have an understanding of the importance of their duties.
We've interviewed accounting professionals and they've answered all our questions about their job description and explained how their services can benefit business owners. We've compiled all this information into articles that we've posted on this site. We hope that you will read them to learn how an accountant can benefit your business.