The IRS has released its plans to have 2021 tax returns due on April 18, 2022, for most individual filers. This marks the first time since the pandemic began that filing deadlines will return to historical norms.
Although Americans can start filing their income tax returns on January 24th, the existing IRS backlogs are likely to cause frustrating delays, according to IRS Commissioner Chuck Rettig. In addition to disruptions caused by the pandemic, budget cuts and outdated technology have bogged down the IRS. According to the IRS website, the IRS has six million unprocessed individual tax returns—up from the typical one million that we saw at this point in the year prior to the pandemic.
As you begin to compile your information for the 2021 tax season, consider some of the following steps you can take to ensure your tax return and refund don’t face delays.
Get your tax information together early
Getting your information together early will allow you to begin your return process as soon as possible. Employers must send W-2s by the last day of January each year, but unfortunately, employers and institutions are not always prepared and on time. Check in with HR and all your online accounts to make sure your address is updated and look for any documents that can be received electronically instead of by mail.
M&S will provide an annual tax organizer to help gather the appropriate 2021 tax information. When gathering your paperwork, here are some common documents to include:
- W-2s from employers
- Form 1099-G from the state unemployment department if you were unemployed at any point in 2021
- 1099s from anyone who paid you miscellaneous, contract, or other relevant funds
- Documents showing medical, educational, childcare, or other expenses, especially if you’re itemizing
- Statements regarding investments or mortgage interest payments
- Receipts to document deductible expenses
If you have not done so already, we encourage you to sign up for a TaxCaddy account with Mowery & Schoenfeld. This will allow you to share your documents electronically, send messages directly to your preparer, complete signatures and file all necessary returns. In addition to providing a simple and safe way for you to complete your taxes from home, it also ensures you avoid the “paper bottle-neck” at the IRS.
For more information or to sign up, please reach out to Stephanie at email@example.com.
File electronically and choose electronic payment or deposits
The quickest way to file your tax return is to opt for electronic filing when you can. In fact, the IRS anticipates most taxpayers will receive their refund within 21 days of when they file electronically if they choose direct deposit and there are no issues with their tax return.
In addition to the strains on the IRS caused by the pandemic, their agency's workforce is the same size now that it was in 1970, which means fewer workers handle a greater volume of returns as the US population continues to grow.
Though most taxpayers already file electronically, around 10 percent of total tax returns still get sent to the IRS on paper. If you can avoid paper filing, you are less likely to encounter delayed refunds, incorrectly assessed penalties, and, of course, lost or delayed mailings.
At Mowery & Schoenfeld, we have technology allows our clients to submit all tax forms, complete signatures and file returns all from the ease and safety of your home.
Use the website—not the phone lines
Last filing season, the IRS received more than 145 million calls from January 1 to May 17, which is four times more than the calls received in an average year. Although sometimes there is no other option, you should always check if the information you’re looking for is something you can get online, like the status of your refund. Remember, by working with a tax advisor, you have someone to process and manage most issues on your behalf.
Although Mowery & Schoenfeld will be sending periodic updates and your accountant will notify you of any changes that directly affect your return, the IRS website also updates their website regularly with any news for taxpayers.
Save letters and notices from the IRS
Every year the IRS mails letters or notices to taxpayers for many different reasons, some of which are vital to correctly filing your tax return. Typically, these letters are about a specific issue with a taxpayer's federal tax return or tax account. A notice may tell you about changes to your account, ask for more information, or inform you that you need to make a payment.
This year, the IRS is already sending out two letters to taxpayers who received COVID relief:
Letter 6419, 2021 advance Child Tax Credit, which contains important information that can help ensure the return is accurate. Eligible taxpayers who received advance Child Tax Credit payments should file a 2021 tax return to receive the second half of the credit, while eligible taxpayers who did not receive the advance payments can claim the full credit by filing their 2021 tax return. (People who received the advance CTC payments can also check the amount of the payments they received by using the CTC Update Portal.)
Letter 6475, Your Third Economic Impact Payment, to individuals who received a third stimulus payment in 2021 in late January.
Even if you report all of your information correctly, the IRS notes it can't issue a refund that involves the Earned Income Tax Credit (EITC) or the Child Tax Credit before mid-February in an effort to help the IRS stop fraudulent refunds from being issued. Be sure to hold onto all of your IRS notices and letters, and ask your M&S Tax Advisor if you have any questions.
Key Individual Tax Filing Dates
- January 14: Taxpayers can begin filing returns through IRS Free File partners or tax software companies (but the returns will not be transmitted to the IRS until January 24th)
- January 18: Due date for tax year 2021 fourth quarter estimated tax payment
- January 24: IRS begins accepting and processing 2021 tax returns
- April 18: Due date to file 2021 tax return or request extension and pay tax
- April 19: Due date to file 2021 tax return or request extension and pay tax owed for those who live in MA or ME
- October 17: Due date to file for those requesting an extension on their 2021 tax returns