We’re coming up on another unusual tax season, which we’ll dig into below. The pandemic’s ripple effects are mostly to blame. Even though there are some potential hiccups associated with this year’s tax-filing process, there are some things you can do for a smoother ride through this tax season. Here are five things to keep in mind as you gear up to submit:
Tax season basics
This year’s tax season starts January 24 and closes April 18. If you can’t submit your tax filing on time, you can extend your deadline to October 15 by sending the IRS Form 4868. It’s important to know that if you’re expecting money back from the government, you’ll submit this form and simply file your taxes by the new deadline. On the other hand, if you think you’ll owe the government money, you’ll still need to pay your best estimate of what you owe by April 18—even if you’ve been granted an extension. An extension simply means you have more time to get your tax filing done, but it does not extend the time you have to submit money owed. If you don’t file an extension and you don’t submit by the April 18 deadline, you’ll owe a late fee, so be sure to either extend your deadline or submit on time to avoid paying extra money.
Related: Rental Property Tax Deductions for Landlords to Keep in Mind in 2022
The IRS is drowning in paperwork. When the IRS offices shut down at the beginning of the pandemic, IRS employees didn’t open their mail. As you can imagine, this significantly delayed the work on their plates. Adding to that delay, the IRS has the same number of employees now as it had in 1970. Without enough employees to handle its workload, the IRS can’t keep up with tax-time demands—especially with the current backlog. As a result of these factors, the IRS still has around 6 million unprocessed tax returns from last year. Usually, this number is closer to 1 million or less by this time. This means that if your tax filing needs to be reviewed by an IRS employee instead of the electronic submission checking system, there’s no telling how long it will take for it to be processed.
Electronic submissions and direct deposit
If you love doing your taxes on paper instead of submitting through software, this is the year to consider switching your method. Since an IRS employee has to process all paper returns and those returns can’t be processed by the electronic system, it’s hard to say when the IRS will be able to get to it. On the other hand, submitting your filing electronically with direct deposit will, almost always, get you your refund back about 21 days after you submit. It would likely be delayed only if there are errors on your return and it is kicked to a human for review.
Stimulus and Child Tax Credit (CTC) letters
There’s an easy way to make sure at least some of your numbers are accurate: the IRS is mailing out Letters 6475 and 6419 to show you how much you’ve received in CTC prepayments and stimulus money. Be sure to keep an eye out for these letters. Unless you opted out of receiving the CTC prepayments, you likely received 50 percent of this credit, from July through December 2021. You can also double check these numbers against your bank statements to check their accuracy.
Professional tax help
If you’ve toyed with the idea of hiring a tax professional in the past, this is a good year to switch to someone who will submit electronically, especially if you normally send in a paper filing. Don’t delay hiring someone so he or she can submit your return as soon as possible. Tax professionals may be bottlenecked closer to April. Hopefully he or she can ensure you don’t have problems submitting, and you can get your money back promptly.
It’s been a wild couple of years, but hopefully next year, life will settle back to a post-pandemic normal, and tax season will run more smoothly for everyone.
Related: Top 11 Real Estate Tax Deduction: What You Should Know in 2022