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Tax Tips for the 2020 Filing Season

Insider tips from 7 experts on how to dominate tax season this year.

It’s safe to say that millions of Americans are breathing a sigh of relief now that the IRS has pushed back the deadline to file your 2020 taxes from April 15 to May 17. But you might not want to celebrate just yet, as there is a major downside to the extension. Fraudsters who attempt to take advantage of Americans on Tax Day now have even more time to try to separate you from your hard-earned income.

To help ensure you don’t fall into any financial traps this tax season, we asked some industry experts to weigh in on ways to stay safe when filing your tax return. From spotting scams to concerns over stimulus repayments, these tips can help you avoid any unnecessary headache on Tax Day.

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Alexa Serrano
CAMS, Banking Editor at Finder.com

1. Stay ahead of fraudsters

Phishing, check and phone scams are not new. But what is new is how fraudsters are applying these scams creatively to our times. For instance, it’s known that fraudsters typically send fake tax refund checks. They follow this by a written notice claiming that they sent you a higher amount than intended and that you’ll need to send them a portion of the money back. But what we’re seeing now is that they’re sending these as a form of fake stimulus checks.

The best way to detect a tax scam is by remembering that the IRS will not contact you by phone, text or social media. If you receive a written notice in the mail, verify that it’s actually coming from the IRS. Letters impersonating the IRS will often contain fake contact numbers, so don’t contact the numbers on the letter. Instead, visit the IRS website and contact them that way.

One of the best ways to stay ahead of fraudsters is to file your taxes early. You’ll not only avoid potential tax-related identity theft but also long lines at the tax accountant’s office. Filing early is especially important if you know you’ve already fallen victim to identity theft.

Many Americans are worried about having to pay back the money they’ve received from stimulus checks once they file taxes. However, this isn’t true. You’ll need to report the money you received, but the IRS states that “there is no provision in the law requiring repayment.

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Melanie Bledsoe
CPA at Bledsoe Consulting Services

2. Be able to spot a scam

In 2020, scams intensified due to coronavirus tax relief. According to the most recent IRS “Dirty Dozen” list, an annual list of the most popular tax scams, some of the most notable include:

  • Phishing – A scammer sends emails, letters, or text messages and impersonates the IRS with the goal to steal taxpayer personal information. They may also create dummy IRS websites with the same goal.
  • Threatening Phone Calls – A scammer calls claiming to be with the IRS and threatens arrest or deportation if the victim doesn’t pay a fake tax bill.
  • Refund Theft – This is a form of identity theft. A scammer files false tax returns under a victim’s name, or diverts refunds to wrong addresses and bank accounts.
  • Unscrupulous Return Preparers – These scammers will refuse to sign the return (ghost preparers), ask the taxpayer to sign a blank return, or promise a large refund before looking at taxpayer records.

There are so many factors that can lower or zero out a tax refund. It depends on your tax situation. Contrary to popular opinion, it’s not ideal to have a large tax refund. When you withhold too much in taxes, you’re giving the IRS an interest free loan, which means less money in your pocket throughout the year. Ideally, your goal should be to get as close to zero taxes owed or paid as possible.

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Eric Pierre, CPA
Chief Executive Officer, Owner, and Principal at Pierre

3. Go paperless if possible

File your taxes electronically if possible and have your refund directly deposited instead of taking a paper check. If you owe taxes, pay your taxes on the IRS Direct Paysite so that you can keep a record of them having your payment on time. Also, if you are hiring a tax professional, make sure that they are using an encrypted/secure portal to transmit your tax documents as these documents should not be freely exchanged over email since the tax documents contain sensitive and private information.

The stimulus checks will have some impact. If you did not get a stimulus check, but your income falls under the threshold ($75K and under if you’re single, $150K and under if you’re married), you can still receive those stimulus payments as credits, which is refundable. The credit can be used to increase your refund or reduce your tax liability. If you already received the stimulus payment, you will not be taxed on your tax return at all; however, you have to report the amounts received.

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Paul Sundin
CPA and tax strategist at Emparion

4. Avoid tax preparers who don’t sign returns

These tax preparers will end up getting more money from you if you allow them. Ensure that the tax preparer you’re in contact with has an IRS Preparer Tax Identification Number or PTIN. Do your due diligence by asking for their qualifications or credentials before transacting with any tax preparer. Lastly, do not sign a blank return or give any information if you aren’t entirely sure of who you’re dealing with.

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Eric Bronnenkant
CPA, CFP and Head of Tax at Betterment

5. Have a healthy dose of skepticism

The IRS will always mail you a bill if you actually owe taxes. You will also have an opportunity to defend yourself and appeal the amount you owe. Anyone who contacts with a demand for immediate payment via debit card, gift card, or wire payment is a fraudster.

A smaller refund can occur when you have income that is not subject to withholding such as self-employment income, interest, dividends, and capital gains. It can also occur if you have reduced your withholding by making adjustments to your W-4.

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Jacob Dayan
CEO and Co-founder of Community Tax and Finance Pal

6. File early and spend responsibly

Stimulus Checks and Tax Returns
If you already received both stimulus checks, then your tax return shouldn’t be affected. However, if you had some substantial changes in 2020 (reduced income, having a baby, etc.) then consider filing as soon as possible to receive the highest amount you can when they send the third stimulus check.

I recommend using your tax refund to pay off debt, boost your savings, or invest in your future. Depending on the amount you receive, you can use that money to really free up your finances so you’re in a better place in the months to come. 2020 was a difficult year for most people, so this is a great opportunity to pay off high interest debts or replenish your emergency fund.


Kristen Bolig
Founder at SecurityNerd

7. Review request thoroughly

Since the IRS communicates through the mail, it can be difficult to discern what is and isn’t a scam. Fortunately, few hackers have the skills to successfully imitate the IRS. If you’re issued a letter, it’s a good idea to review how the sender requests payment. The IRS only accepts online payment through their official website and their electronic federal tax payment system. If the sender requests money through another site, it’s a giant red flag.

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Staff writer

Michael Benninger is lead editor of banking at Forbes Advisor and a former writer at Finder, specializing in banking. His work and analysis has been featured in Business Insider, Yahoo Finance, GoBankingRates and the Los Angeles Times, among other top media. He holds a B.A. in business administration and marketing from Rowan University in New Jersey. See full bio

Michael's expertise
Michael has written 42 Finder guides across topics including:
  • Kids’ banking products
  • Cash management accounts
  • Fintechs and neobanks
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Casey Kozieja is a Senior Account Executive at 5W Public Relations and former Finance PR Specialist at Finder.com, working to help millions of Americans make smart financial decisions. She earned a bachelor’s degree in public relations from Penn State University. Prior to Finder, Casey worked in entertainment PR, helping to publicize musicians and films. In her spare time, she enjoys traveling to new places, hanging out with friends and searching NYC for hidden shopping gems. See full bio

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