Top Things to Remember When Filing Your Taxes for 2021

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This tax filing season will be unique in that taxpayers will be afforded tax credits and rebates which were not available in the past as a result of stimulus-related legislation.

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In order to help taxpayers make sure they have a smooth tax filing experience, the IRS has released a checklist to ensure taxpayers get their return as quickly as possible.

First: go online before you call the IRS. After an unprecedented year in 2021 — with the simultaneous distributions of stimulus relief checks, advance child tax credit payments, and COVID-19 variants stifling the agency workforce — the IRS was faced with a tremendous backlog of requests, and not enough staff to help the general public. 

This resulted in an increase of online resources and tools being made available by the IRS, in the aims of helping the public file and organize federal tax returns. In most cases, answers to tax questions can be fulfilled through online resources at IRS.gov without needing to wait on the phone or attend an in-person appointment. 

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The agency has offered several tips for taxpayers to stay up-to-date on important and developing tax information. These suggestions include following IRS social media accounts on Twitter, Facebook, Instagram and LinkedIn, as well as subscribing to IRS email lists. There is also a mobile app, “IRS2Go,” which you can download for notifications on new tax-related information.

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The Importance of Paperwork When Filing Taxes 

The next step is to make sure you collect all your documents before preparing a tax return. For most people, this means simple income evidence documents like a W-2 or 1099 form. Those who received advance child tax credit payments or claimed the recovery rebate credit, stimulus check, or CTC money last year will need to consult additional information, like Letters 6417, 6419, or 6475 — as well as any pertinent information regarding stimulus payments. These documents will help reconcile any amounts you are owed this year, and will help to prevent any wrongful calculations leading to an undue IRS bill.

The other half of the 2021 child tax credit will be paid out during tax time this year, and if there were significant income changes to your account concerning last year, you could phase out of the tax credit and end up owing the IRS money. Specific care must be taken when filing taxes this year concerning both the receipt of any credits you are owed that you did not receive — and, conversely, government-issued overpayments issued to you (payments which could result in a surprise tax bill).

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Learn: 5 Things To Know About How the Stimulus Checks Can Affect Your Taxes
Explore: Pros and Cons of Living in a State With No Income Tax

Another piece of advice the IRS gives: File online where possible and make sure you set up direct deposit. This will ensure you receive your return as quickly as possible. For those making an adjusted gross income of $73,000 or below, you can even file your taxes for free using the IRS Free File service.

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About the Author

Georgina Tzanetos is a former financial advisor who studied post-industrial capitalist structures at New York University. She has eight years of experience with concentrations in asset management, portfolio management, private client banking, and investment research. Georgina has written for Investopedia and WallStreetMojo. 
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