Get your financial records in order and fire up your computer: It’s tax season. This year, the IRS expects to receive about 160 million individual income tax returns. While most people don’t look forward to filing their taxes, most taxpayers are looking forward to receiving their refunds; last year's average tax refund was more than $2,800.
This year, the IRS began accepting returns on January 24, allowing time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits. This programming work is critical to ensuring IRS systems run smoothly. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers. These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2021 tax return.
The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds—as well having all the information they need to file an accurate return to avoid delays. The IRS's Free File program allows taxpayers who made $73,000 or less in 2021 to file their taxes electronically for free using software provided by commercial tax filing companies. More information on Free File is available on the IRS.gov website.
The Extra Mile: When is the deadline to file your tax year 2021 personal federal income taxes?
Anthony Burke: The filing deadline to submit 2021 tax returns or an extension to file and pay tax owed is Monday, April 18, 2022, for most taxpayers. By law, Washington, D.C., holidays impact tax deadlines for everyone in the same way federal holidays do. The due date is April 18, instead of April 15, because of the Emancipation Day holiday in the District of Columbia for everyone except taxpayers who live in Maine or Massachusetts. Taxpayers in Maine or Massachusetts have until April 19, 2022, to file their returns due to the Patriots' Day holiday in those states. Taxpayers requesting an extension will have until Monday, October 17, 2022, to file.
The Extra Mile: What is the fastest way to file your taxes?
Burke: Fast is good for sure, but fast and accurate is very important. Seventy percent of taxpayers qualify to use the IRS Free File program, which is a partnership with the private software industry to provide free tax preparation software to taxpayers whose adjusted gross income was $73,000 or less in 2021. Filing your tax return is also free, quick, and easy if you do it yourself. You can usually complete a simple IRS return in 30 minutes or less. Gathering all the documents you need—[Form] W-2s, 1099s, statements on interest and investment income, etcetera—usually takes longer than actually entering the information into the software and e-filing the return. If you have all your documents ready, the process can be done quickly.
Every year, more people choose to file from a home computer. During 2021, slightly less than half, about 44 percent, of all the e-file returns the IRS received were prepared on a home computer.
The Extra Mile: Tax documents normally start arriving in people’s mailboxes in late January. What documents should filers locate before preparing their taxes?
Burke: For most people, a Form W-2–Wage Tax Statement, from your employer is the key to getting started. If you had side jobs or other income, you may also receive a Form 1099 from whomever paid you during 2021, including banks that send 1099s showing interest, and brokers who send 1099s showing dividends. Don’t forget those bank and investment income statements; you’ll need those to calculate your income.
Also, in late December 2021, and continuing into January, the IRS started sending letters to people who received advance Child Tax Credit payments. The letter says, "2021 Total Advance Child Tax Credit (AdvCTC) Payments" near the top and, "Letter 6419" on the bottom righthand side of the page. The letter contains important information that can help ensure the tax return is accurate.
People who received advance CTC payments can also check the amount of the payments they received by checking their Online Account on IRS.gov. Eligible taxpayers who received Advance Child Tax Credit payments should file a 2021 tax return to receive the second half of the credit. Eligible taxpayers who did not receive Advance Child Tax Credit payments can claim the full credit by filing a tax return.
The Extra Mile:What should people do if they haven’t received a Form W-2 from their employer?
Burke: Employers have until January 31 to issue W-2s to their employees. After that time, you should check with your employer as to when you can expect a W-2. But you still have to file on time, even if you don’t get your Form W-2. You should be able to figure your income and withholding from your wage and earning statement from your employer’s HR department; you can use Form 4852–Substitute for Form W-2 for filing your return.
The Extra Mile: Before I ask about professional tax help, any special reminders for taxpayers doing their own taxes?
Burke: This year, the IRS reminds those taking the standard deduction that they can still claim a deduction for cash contributions that they made to charities by Dec. 31, 2021, up to $300 for single taxpayers, $600 for married couples filing jointly.
The Extra Mile: Also, before I forget, what about stimulus payments? Anything taxpayers need to remember for their 2021 returns?
Burke: By Jan. 26, all third-round Economic Impact Payments had been issued and the IRS reminds people to claim any remaining stimulus payment they're entitled to on their 2021 income tax return as part of the 2021 Recovery Rebate Credit.
Parents of a child born in 2021—or parents and guardians who added a new child to their family in 2021 —did not receive a third-round Economic Impact Payment for that child and may be eligible to receive up to $1,400 for the child by claiming the Recovery Rebate Credit.
While some third-round Economic Impact Payments may still be in the mail, the IRS is no longer issuing first-, second-, or third-round Economic Impact Payments. Through December 31, the IRS issued more than 175 million third-round payments totaling over $400 billion to individuals and families across the country while simultaneously managing an extended filing season in 2021.
Third-round Economic Impact Payments were advance payments of the 2021 Recovery Rebate Credit. In late January, the IRS began issuing Letter 6475–Your Third Economic Impact Payment, to recipients of the third-round Economic Impact Payment. This letter will help Economic Impact Payment recipients determine if they are entitled to and should claim the Recovery Rebate Credit on their 2021 tax returns when they file in 2022.
The Extra Mile: Many Americans opt to use a tax preparer to help them file a return. What advice do you have for choosing a tax preparer?
Burke: More than half of all taxpayers hire a professional when it’s time to file a tax return, and the vast majority of tax pros are honest. You should, however, use the same care in selecting a tax professional as you do in selecting a doctor or attorney. You are going to be sharing confidential information with your tax person, so get referrals, and do some research.
Be wary of a tax preparer who wants to take a percentage of your refund as their fee. Also, make sure that the tax preparer signs the return and includes a Preparer Tax Identification Number (PTIN). If the preparer is unwilling to sign the return, include a PTIN, and e-file the return, look for another preparer.
Never sign a blank tax return when someone tells you they will just fill in the numbers later. In the end, it is your signature on the tax return, so you’re responsible for it. Be safe with your personal information, and be sure to ask questions until you feel comfortable with the person who will be preparing your taxes.
The Extra Mile: For those filing their taxes on their own, what are some common errors to avoid?
Burke: The biggest mistake a taxpayer could make is not using IRS e-file because e-file is the fastest and most accurate way to do your taxes.
With e-file, math mistakes and mistakes calculating certain credits or deductions are caught by your computer software, but it is still a good idea to double-check the math and [to] be sure to read instructions and qualifications carefully. Bottom line, if we catch an error on your return, it will definitely slow down the processing, and you will have to wait longer to get any refund money. You may end up with a smaller refund or even owe additional tax.
The Extra Mile: Some early birds may have already filed their taxes. How can they check the status of their refund, and generally how long does it take for a refund to be processed?
Burke: For taxpayers who e-file and choose direct deposit, IRS generally issues refunds in less than 21 days. Use the IRS website, IRS.gov/refunds
The Extra Mile: If I have a question about filing my taxes, what is the best way to reach the IRS?
Burke: By far, the best way to get your question answered is to start with the www.IRS.gov website.
IRS.gov is the quickest and easiest option for help. IRS assisted phone lines continue to receive record numbers of calls, more than the agency can handle with its limited resources. To avoid delays: Check IRS.gov first for refund information and answers to tax questions Taxpayers who want to be able to access information about their personal taxes from the IRS should go to IRS.gov and create an Online Account, which securely provides tax account information on IRS.gov and helps provide important filing information.
Last filing season, as a result of COVID-era tax changes and broader pandemic challenges, the IRS phone systems received more than 145 million calls from January 1 – May 17, more than four times more calls than in an average year. In addition to IRS.gov, the IRS has a variety of other free options available to help taxpayers, ranging from free assistance at Volunteer Income Tax Assistance and Tax Counseling for the Elderly locations across the country to the availability of the IRS Free File program.