Federal tax filing season is set to begin in January. 24, and if you want your tax refund as soon as possible, you’ll want to start one.
The IRS said it is dealing with staff shortages and a backlog of more than 6 million individual tax returns as of the end of December last year, and expects “enormous challenges” during this year’s tax filing season.
Move over the ensuing headache and don’t wait until the April 18 deadline to file. Here are some tips to ensure that the refund is made as quickly as possible.
1. Start collecting tax documents now, and don’t throw away any letters the IRS sends to you.
Just because you can’t file your tax return doesn’t mean you can’t start organizing your documents. A lot of important tax documents are sent out soon.
“Most documents, you have to keep in mind, might not arrive in your inbox or in your mailbox by the end of this month. 31,” said Camberley Washington, a New Orleans-based certified public accountant and former IRS agent. Keep an eye out for your W-2 if you have an employer, for example, an interest and dividend statement from a bank, Form 1099 if you worked freelance, or Form 1099-G if you received unemployment compensation, Washington. he said.
The deadline to file your tax return for 2021 is April 18, 2022, unless you live in Maine or Massachusetts, where the deadline is April 19 due to the Patriots Day holiday. But don’t wait till then. To avoid any additional delays, “as soon as you gather all of your documents, make sure you file your tax return as soon as possible,” Washington said.
If you received money from a third economic stimulus payment or if you are one of the millions of Americans who have received payments from the Extended Child Tax Credit, that Will need to match with your 2021 tax return.
If you fall into the Child Tax Credit group, the IRS will send you Letter 6419, 2021 Advance CTC, which includes the total amount of Advance Child Tax Credit payments you received in 2021 and the number of eligible children used to calculate these payments. Will be ,
If you received money from the third round of economic stimulus payments, the IRS will issue you Letter 6475, which will tell you whether you are entitled to and should claim the recovery rebate credit on your tax return.
“When the taxpayer receives that letter, I recommend holding that letter. When it comes time to prepare that tax return, we need to put in the exact amount that person is going to receive, Minnie Sage, program director of Tax-Aid, a nonprofit that provides free tax services to the San Francisco Bay Area. “If it’s off by any amount, it will slow the returns.”
She also notes that you should pay attention to any state or local letters regarding tax information, such as the Golden State stimulus payment in California.
If you throw away or lose these letters, Double-check your bank statements to find out the exact amount of any payments, or if you have an online IRS account, you can see the exact amount you received federally, suggests Sage.
2. Avoid filing or receiving returns by paper, and sign up for direct deposit.
“Whenever possible, a taxpayer should always file his return electronically,” Sage said.
Even the IRS agrees that filing or receiving returns or refunds by paper is not recommended. On their website, they simply state that filing your tax return electronically and opting for direct deposit for your refund is “the fastest and safest way to receive your money.”
That’s because receiving a return check sent physically to you raises the chance that it will be lost or stolen or may not be returned to the IRS.
There may also be a delay in knowing the status of your refund if you choose paper. IRS Tracker Tool “Where’s My Refund?” Taxpayer updates on the status of approvals and issuance of refunds. And according to the IRS website, the status of your refund will be available within one day after the IRS accepts your electronic tax return, but if you file by paper, it can take up to four weeks after mailing it.
Keep in mind that some refunds will not be sent after a specified date. For example, refunds for people claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) can’t be issued before mid-February, because it’s the Protection of Americans from Tax Increases (PATH) Act. There is a security measure under.
The IRS says it sends Most tax refunds in less than 21 days, but it acknowledged that due to COVID-19-related delays, the agency has taken longer to issue refunds for incomplete returns that have an error or claim EITC or ACTC .
“If you file electronically, if you file free and clear of any errors, if you choose direct deposit, you will get it back within 21 days. I have seen this happen ,” Washington said. “But at no point do you have those three different criteria that can look at individuals over the long term as it relates to getting their money back.”