NASHVILLE – With Tax Day (April 15) a month away, the Tennessee Department of Commerce & Insurance and the Tennessee State Board of Accountancy are sharing important information for consumers who might be waiting until the last minute to file their taxes.
“Last year was a challenging one for many Tennessee consumers who faced financial uncertainty because of the COVID-19 pandemic,” said Board Executive Director Wendy Garvin. “Tax Day is still set for April 15, 2021. If you need to file an extension, the time to do that is before the deadline. If you are filing a return on April 15, all consumers should remember that licensed certified public accountants (CPA) can be a valuable resource when preparing a tax return. Additionally, using a licensed CPA gives consumers peace of mind that they’re working with a licensed professional.”
The Tennessee State Board of Accountancy protects the public interest by ensuring that persons professing special competence in accountancy meet minimum requirements to be a licensed CPA. Consumers who have a complaint about a licensed CPA can file a complaint by visiting our website here.
TDCI encourages Tennesseans to consider the following when submitting income taxes this year:
If you decide to file your tax return yourself, remember:
If your income is $72,000 or less, you can use any one of several major tax preparation software products, offered through the Free File Alliance, to prepare and file your return for free. The Free File Alliance is a nonprofit coalition of industry leading tax software companies partnered with the IRS to help Americans prepare and e-file their federal tax returns for free. If your income is more than $72,000, you can still download free tax filing forms through the IRS.
There are many easy-to-use tax preparation software products on the market that will help you walk through the tax filing process step-by-step. These are not free, but they may be less expensive than paying someone to file your return for you.
The third round of stimulus checks will be based on Adjusted Gross Income from your 2020 tax return. If the 2020 tax return has not been filed, the payment will be based on Adjusted Gross Income from your 2019 return. If you had a significant income reduction in 2020 and you have not filed your 2020 return, you may not receive a stimulus check even though you qualify. Taxpayers will be given an opportunity to obtain any stimulus due but not paid when they file their 2021 tax returns.
If you did not receive the full stimulus payments in 2020 and qualify for those payments based on your 2020 Adjusted Gross Income, you will be able to claim those payments through the Recovery Rebate Credit on your 2020 tax return, increasing any refund of taxes due. Find more information at Recovery Rebate Credit | Internal Revenue Service (irs.gov).
What’s New for 2020 Tax Returns
Taxpayers have the option to use prior year income amounts from 2019 when computing the Earned Income Tax Credit and Additional Child Tax Credit.
If a taxpayer was paid interest on a federal tax refund due to late processing, that interest is taxable in 2020 and must be reported on the 2020 tax return. The IRS will send a Form 1099-INT if you received interest of $10 or more on your refund.
In 2020, taxpayers who do not itemize deductions may take a charitable deduction up to $300 for cash contributions made in 2020 to qualifying organizations. The maximum allowable amount is the same for both single and married filing joint filers. In 2021, the charitable deduction will remain $300 for single files and increase to $600 for joint filers.
Beware of potential tax frauds. Tax fraud is becoming increasingly common and more sophisticated. Here are a few ways to protect yourself from fraud:
File electronically and request that your refund be deposited directly into your account.
Verify the license status of your Certified Public Accountant (CPA) at verify.tn.gov. If you decide to hire a CPA, you may contact the Tennessee Board of Accountancy to find out if complaints or disciplinary actions have been filed against him/her. Contact the Tennessee Board of Accountancy at firstname.lastname@example.org or (615) 741-2550 or visit us online.
Many consumers use individuals who are not CPAs to complete their tax returns. The IRS has a Directory of Federal Tax Return preparers with credentials (CPA, attorney, EA, annual filing season program participant) for public use. (RPO Preparer Directory (treasury.gov). However, this does not include all individuals who are authorized to file tax returns for the public — only those with special credentials. Other resources for checking your tax preparer include:
Use ID theft prevention measures. Don’t carry your Social Security card with you. Also, don’t carry your Medicare card unless you are visiting a doctor for the first time.
Check your credit report. You can review your credit report for free every 12 months at www.AnnualCreditReport.com, or by calling 877-322-8228.
Stay alert for phone scams.
The IRS will never:
Call or email you to ask for personal information.
Demand immediate payment without first sending you a bill in the mail and giving you an opportunity to question or appeal the amount they say you owe.
Require you use a specific payment method for taxes, like a prepaid debit card.
Ask for credit card information over the phone.
Threaten to have you arrested for not paying.
If you have been the victim of any of these scams, consumers are encouraged to file a report with the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484 or www.treasury.gov/tigta. If you suspect you’ve been a victim of identity theft involving your income tax return, report it to the IRS. For more consumer tips and information about reporting other forms of identity theft, visit www.tn.gov/consumer. For other questions or concerns, contact the Tennessee State Board of Accountancy by email at email@example.com or call (615) 741-2550.