Believe it or not, yet another tax filing season is upon us. Pretty soon, you’ll start getting your 2021 year-end wage, investment, and mortgage interest statements. Between now and when you are ready to fill out those lovely tax forms, you can take three steps to get a jump on tax season and feel more confident. Most of the tips you need are on the IRS website. For free! Well, not exactly for free – our tax dollars pay for the IRS.
Get your money’s worth with these three tips to be prepared for tax season:
You can take steps now to get a jump on filing your 2021 income tax return. Use this link to access a list of documents you’ll need to file, check on your tax withholdings, verify your bank information, and reconcile your Advance Child Tax Credit. This page also has a link to potential issues that can delay the processing of your 2021 income tax return. https://www.irs.gov/individuals/steps-to-take-now-to-get-a-jump-on-next-years-taxes.
- Check Your Online Account
Every taxpayer can access her or his online account to see the information that the IRS has on file. Your individual account information includes any outstanding tax balances, a five-year history of payments made, and copies of your tax records. You can even view the details of any payment plans in place with the IRS. https://www.irs.gov/payments/your-online-account
- Expectations for IRS Operations
The IRS is just as overworked and under-resourced as it was during the last two tax seasons. Service delays include phone support call wait times, paper return processing times, and manual reviews of electronically filed returns. While they are reporting that mission-critical functions are continuing during COVID-19, this link provides periodic updates on expected wait times to reduce frustration and potential complaints. https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue
Tax season is almost here. The IRS has tips to help you prepare and feel more confident about filing an accurate return, and to make the filing process go more smoothly for everyone. Being prepared can help you prevent a delay in processing your return and help manage your expectations for IRS operations during tax filing season. Sure, filing your taxes is not a lot of fun, but getting prepared now will make the process easier and less stressful.
The holiday season is upon us, and tax season will be here before you know it. Filing your tax returns is not exactly a festive time, but, just like the holidays, the season will be less stressful if you are prepared. Even though the year isn’t over yet, starting early reduces stress and confusion caused by rushing to meet a deadline. Plus, you have time to review your situation for tax savings or other strategies that may still be available before year-end, such as contributing to a retirement plan.
Whether you file your own tax returns or engage a tax professional, these three tips will help you be prepared for next tax season:
Various pandemic-relief and other tax changes could impact the information that you need to gather when filing your 2021 income taxes. The expanded Advance Child Tax Credit was authorized by the American Rescue Plan Act in March. Monthly advance tax credit payments started in July, based on the parent’s 2020 reported income, or the 2019 income if a 2020 return was not filed. The March tax act also included a third round of Economic Impact Payments, depending on a taxpayer’s income level and family size.
- Tax Estimates and Withholdings
Did you owe a lot when filing your 2020 returns, or did you get a big refund? An IRS Paycheck Checkup is an online tool to make sure that your withholdings will cover your anticipated tax liability https://www.irs.gov/paycheck-checkup.Taxpayers with investment, self-employment or other non-wage income can check if they need to make a larger or smaller quarterly estimated tax payments at https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes.
Use your 2020 tax return to identify documents that you’ll need to accumulate in preparation for next tax season. Start printing the charitable donation letters and real estate tax bills to cut the delay when the 1099s and W-2s are released or mailed to you. If a life event in 2021, such as buying a home, starting a business, or changing your marital status, you need to check out how it impacts your taxes. You might need a tax professional to help you plan for and understand the tax impacts of life changes.
Follow these three tips to be prepared for next tax season. And one last thing. Supply chain issues hit the tax profession just like it’s hit the store shelves. If you plan to engage a tax professional for your 2021 preparation, start looking now. There’s a shortage.