3 Tips to Speed Processing and Avoid Hassles This Tax Season

The IRS began accepting 2021 individual tax returns on January 24, 2022. Here are a few tips to help speed the processing and avoid unnecessary hassles.

Tip 1: Gather all documents needed to prepare an accurate return

In addition to W-2 and 1099 forms, you may have received statements or letters in connection with Economic Impact Payments (EIPs) or Advance Child Tax Credit (ACTC) payments.

Letter 6419, 2021 Total Advance Child Tax Credit Payments, notifies taxpayers who received ACTC payments as to how much they received. The advance payments received represented about one-half of the total credit. Therefore, eligible taxpayers need to file a return to collect the rest of the credit. Letter 6475, Your Third Economic Impact Payment, informs taxpayers who received an EIP in 2021 of the amount of that payment. Taxpayers need to know the amount to determine if they can claim an additional credit on their tax returns. 

Taxpayers who received EIP or ACTC payments are required to include that information on their returns. According to the IRS, failure to include this information means the return is incomplete and will result in additional processing time, which may delay any refund owed to the taxpayer.

Tip 2: Review certain information on your prepared return

Be sure each Social Security number on your tax return appears exactly as printed on your Social Security card(s). Be especially mindful if you got married or had a child during 2021. Also, make sure that names are not misspelled. If you are receiving your refund by direct deposit, check the routing number and bank account number for accuracy.

Keep in mind, the fastest way to get a refund is to file early, file electronically and request for the money to be directly deposited into your bank account. 

Tip 3: Have lots of patience

The third filing season since the pandemic began arrives amidst the closure of IRS tax return processing centers, staff shortages heightened by health and safety concerns and new responsibilities imposed on the agency recently due to changes in tax laws and regulations.

Know that if you call the IRS with questions, you will be on hold for a long time. Consider setting up an online account on the IRS’s website. Online, you will be able to verify child tax credit payments and stimulus payments you received, access tax records, make and view tax payments and more.

Also, make sure you keep any letters you receive from the IRS and include them with your tax documents. If amounts on your return do not match the IRS’s records, your refund will be delayed.

What if I don’t file on time or I can’t pay my tax bill?

Separate penalties apply for failing to file a tax return and failing to pay taxes due.  The penalties imposed are a percentage of the taxes you didn’t pay or didn’t pay on time. If you obtain an extension, you will not face the late filing penalty unless you miss the extended due date. However, filing an extension does not give you more time to pay your tax. When you file an extension, you are required to pay an estimate of any owed taxes by the original due date to avoid potential penalties.

We hope this information was helpful and allows you to achieve your goal of filing your taxes, on time, with accuracy and efficiency. If you need additional help identifying which documents should be shared with us when we file your returns, contact your friendly tax consultants at Mahoney. We can answer any questions you have this tax season and point you in the right direction.