January 24th, Monday welcomed the new challenging tax season and the IRS is accepting the 2021 tax returns. You can file your tax return anytime as the deadline is April 18th, 2022.
If you are thinking that there are chances of extension, well, there is no such news yet. As the pandemic was tough on every individual, the tax returns for 2020 were extended.
A taxpayer advocate service report said, “The unprecedented processing and refund delays taxpayers experienced in 2021 could be as bad, and potentially worse, in 2022.”
Since there are a couple of changes with new tax breaks plus the additional pressure or pandemic relief, IRS is failing to “properly reconcile their monthly advanced Child Tax Credit payments or the third stimulus payment with their 2021 return,” as the report stated.
Commissioner Chuck Rettig asked the citizens to choose the electronic filing method to speed up the process. The paper tax return may result in delays and it is recommended to stick to electronic filing.
Now, if you want, you can start filing but you can wait because there is a lot of time left before the last date arrives. You must ensure and have all the valid information so that your filings do not get flagged due to incorrect inputs.
Howard Samuels who is a certified public accountant in New Jersey clarified that not all forms will be available. Certain forms are still inaccessible and it may take time for those to be released.
Delays May Happen on IRS Forms and 1099s
An independent contractor, freelancer, or anyone who has a side business needs to collect W-2s from their employers or 1099 forms for filing respective returns.
People who were unemployed even at some point in 2021 need to fill up the 1099-G form. This will be an official document that will be submitted to the state unemployment department.
In 2020, applicants who got unemployment benefits also received tax breaks. But 2021 will be different and the citizens have to pay taxes on the income.
For eligible candidates who have received child tax payments in advance, the IRS will send these candidates a Letter 6419. Now, they can compare and check the amount they have received and the amount that is yet to be received.
For those candidates who aren’t eligible but still got the payment, they have to pay back all the money.
There are three stimulus checks in total and only one payment was credited to the candidates’ account. So, candidates who received even one stimulus payment will get a Letter 6475 at the end of January. The letter will state the amount the candidate has received and if you are still eligible to receive more.
There are not only delays in IRS brokerages but the agency is also struggling to manage accounts that are creating a mess. The IRS had already set multiple deadlines for January and February for respective brokerages so that they can send over investment-related 1099s.
Grez further went on to say, “what will happen is you’ll have to file an amended return and effectively you’ll just exacerbate the problem for the IRS because then this is just another thing they’ll have to deal with.”
Hence, the chances of witnessing delays in a refund aren’t surprising.
File Once You Have Received All the Necessary Documents
You have to wait for many forms in the meantime but once everything is delivered, you need to organize. For getting the refund you deserve, make sure to include all the documents that will help in quick verification.
Even if you find out that you owe money to the government, you do not have to pay the money immediately. People fail to realize that they have time till April 18 to clear dues if any.
In case, you are currently not capable of paying the taxes that you are supposed to pay, you can request a payment plan along with the agency IRS.