Tax filing season begins Monday, and the Internal Revenue Service has some tips it says taxpayers should remember before submitting their returns if they want to avoid lengthy delays, especially for those anticipating a refund such as the remainder of the child tax credit.
The season is starting 17 days earlier than last year. The IRS is warning that a resurgence of COVID-19 infections on top of less funding authorization from Congress than the Biden administration had requested could make this filing season particularly challenging.
Avoiding a paper tax return will be more than important than ever this year to avert processing delays, IRS Commissioner Chuck Rettig said earlier this month. He urged taxpayers to file their returns electronically and to get their refunds by direct deposit.
Have the proper documents before filing taxes
Any errors can slow down processing of the return and sending back a refund. The IRS said to be sure to collect all documents before preparing your tax return, including W-2s, Form 1099s and other income related statements.
Included in that are letters the IRS sent out this month related to the advance child tax credit and the third stimulus check, officially called the third Economic Impact Payment. These letters -- 6419 and 6475, respectively -- tell the taxpayer how much they received of each in 2021. Taxpayers can also check for the amounts they received on the website IRS.gov.
$5,000 from the IRS for a newborn, at least for some
Taxpayers who had a child join their family in 2021 could be in for an additional $5,000 from the IRS via the Economic Impact Payments and the child tax credit.
Those payments were automatically sent to people in 2021 based on previous tax returns. But if a family added a child, they would have no reason to report it to the IRS until it was time to file taxes. That means they may not have received any of the monthly child tax credit payments they were eligible for, nor the $1,400 stimulus payment for dependents.
Under the child tax credit increase passed by Congress in 2021, parents with children up to age 6 would be eligible for $3,600. Those with children ages 6-17 would get $3,000.
Presuming the parents fell within the income limits for the stimulus and the child tax credit, and the child joined their family before the start of 2022, then they could be getting up to $5,000 when they file. That's $1,400 from the Economic Impact Payment -- which must be claimed as a Recovery Rebate Credit -- and the full child tax credit amount.
Free online filing tools
Those who made $73,000 or less in 2021 can use any of the IRS Free File tools to file their taxes electronically. The agency said tax software providers make those products available for free as part of a 20-year partnership. These tools area already available -- taxpayers don't need to wait until the start of filing season to access them.
The IRS also said taxpayers should go to its website to find answers to questions before choosing to call the agency by phone. Doing the latter could lead to more delays.
The deadline for tax returns to be filed or for requesting an extension is Monday, April 18 this year, three days later than the normal April 15 deadline for filing taxes. The later date is a result of a Emancipation Holiday in the District of Columbia. By law, Washington, D.C., holidays impact tax deadlines for everyone the same way federal holidays do.