Get a Jump on Your Taxes With These Tips From the IRS for 2022
From reconciling your advance Child Tax Credits with what you were supposed to receive to reporting stimulus payments and unemployment income, federal taxes for 2021 promise to be more complicated than ever.
Fortunately, the IRS has provided a quick tip sheet on ways to prepare before it comes time to file in February 2022. Taxpayers will have until April 15, 2022, as they did in most other years, to file their tax returns for 2021. Publications such as Fingerlakes1.com note that “it’s a possibility” this deadline could be extended once again due to the COVID-19 pandemic. In 2021, tax filing deadlines were delayed until May 17.
However, the earlier you file, the earlier the IRS may process your return and, if you are entitled to one, send out your tax refund. In general, refunds typically take less than 21 days to process. The IRS website warns taxpayers that if you are filing with an Earned Income Tax Credit or an Additional Child Tax Credit, your refund cannot be issued before mid-February.
You can get a jump on your 2021 taxes by following these tips:
View Key Data From Your Online IRS Account
It’s smart to set up your IRS account in advance. Prior to tax day, you can verify the Economic Impact Payments (aka pandemic stimulus funds) you received in 2021, view data from your most recent tax return to see if your income has changed substantially and even view your payment history to the IRS.
Gather Your Tax Records
To prepare for tax day, you’ll need a lot of paperwork. Some of it may be digital, but others will come in printed form.
Some of the documents you will need include:
- W-2 form(s) from your employer
- 1099 forms if you did any gig work
- 1099 forms for unemployment compensation, dividends, distributions from investments, and interest
- Paperwork showing mortgage interest payments
- Property tax bill
- Form 1095-A if you purchased health insurance through the Marketplace
- Letter 6419 if you claimed the Advance Child Tax Credit
- Letter 6475 if you received Economic Impact Payments
If you itemize your tax returns, you’ll also want to collect your receipts or credit card/bank statements showing deductible expenses and paperwork or receipts showing charitable contributions that may be deductible.
Check Your Individual Tax Identification Number
If you file taxes using an ITIN, make sure it has not expired.
See If You’ve Withheld Enough Taxes in 2021
Use the IRS Tax Withholding Estimator to show how much withholding taxes should have been taken out of your paycheck. It’s not too late to adjust your withholding for the last few paychecks of the year to avoid a tax bill in April.
Set Up Direct Deposit with the IRS
Did you know that 80% of taxpayers receive their refunds via direct deposit? The IRS says filing electronically and using direct deposit is the fastest way to receive your refund. If you don’t have a bank, set one up before you file.
You can browse GOBankingRates’ Best Banks 2022 to find an FDIC-insured bank that offers the features that you need with low fees or no fees.
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Book an Appointment With a Tax Preparer or Tax Accountant
The best tax preparers often book up far in advance of April 15. If you think you may need some extra help with your taxes this year, start shopping around for a tax prep company or a tax accountant you can trust.
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Reach out and book your appointment as soon as you you have all of your forms available. Businesses had until Jan. 31 to provide you with any W-2 or 1099 forms.
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