3 (+2) Things to Know When Filing Your 2021 Tax Returns

Posted on Mon, Jan 31, 2022 ©2021 Drucker & Scaccetti

Calendar-DeadlineBy: Eric R. Elmore

 

We’re off to the races as the 2022 tax season is officially underway. You may have received (or will soon receive) your 2021 tax documents, including W-2s and 1099s, and we tax advisors are gearing up to help you maximize your tax savings. Today, we list and discuss three (3) of the IRS’s top things to remember when filing your 2021 tax returns (plus two bonus tips). Let’s get at it!

 

It helps to understand the times in which we live and its impact on tax filing. In the past 23 months, the pandemic has seemed to ebb and flow. Throughout 2020 and 2021, the IRS, which was already dealing with staff shortages and outdated technology, has experienced closures and service interruptions, just like every other business. Already overwhelmed before the pandemic, the IRS is dealing with unprecedented backlogs, at the same time it is launching the 2022 tax filing season. These hurdles have caused massive delays with contacting the IRS on the phone and with the processing of returns. Having this knowledge in advance is a good jumping-off point for sharing the IRS’s top 3 things to remember when filing this year:

 

  1. File an accurate return and use e-file and direct deposit to avoid delays. You should electronically file and choose direct deposit as soon as you have everything you need to file an accurate return. You have many choices, including using a trusted tax professional. For those using e-file, the software helps you avoid mistakes by doing the math. It guides you through each section of your tax return using a question-and-answer format.
  2. For an accurate return, collect all documents before preparing a tax return; make sure stimulus payment and advance Child Tax Credit information is accurate. In addition to collecting W-2s, Form 1099s, and other income-related statements, it is important to have your advance Child Tax Credit and Economic Impact Payment information on hand when filing, if applicable. Most eligible people already received their stimulus payments. If you were eligible for an Economic Impact Payment, but did receive one, you may be eligible for the Recovery Rebate Credit (RRC).
  3. Avoid lengthy phone delays; use online resources before calling the IRS. Phone demand on IRS assistance lines remains at record highs. To avoid lengthy delays, the IRS urges people to use IRS.gov to get answers to tax questions, check a refund status or pay taxes. There's no wait time or appointment needed — online tools and resources are available 24 hours a day.

 

If you are working with a tax advisor and have a more complex tax profile, the items above likely will not apply to you. But don’t worry, The Tax Warriors® at Drucker & Scaccetti have two bonus items that will help you.

 

BONUS #1 – Don’t be a procrastinator—gather and send documents to your tax advisor early! Procrastination hurts both you and your tax advisor.  Getting your information to your accountant earlier may result in lower tax preparation fees and less stress for all involved. We wrote a blog on gathering documents and offered a few tips and tricks to doing it quickly and orderly.

 

BONUS #2 - Provide electronic documents whenever possible. The electronic tax documents obtained directly from your banks and brokerages are high quality and easy to read, which minimizes errors. Delivering tax information to your tax advisor via a secure and trusted system is imperative to protect your information and your identity. Never send financial documents containing personal identifiable information (PII) unless it is sent securely. The Tax Warriors use TaxCaddy and ShareFile as secure means to send documents back and forth with clients.

 

The busy tax season doesn’t have to stress you out, as long as you follow the steps above. Stay informed and connected to the IRS via its website. And, if you use a tax advisor, stay connected to them by returning their emails and phone calls in a timely manner. Giving tax filing the respect it deserves helps everyone in the process to service you better.

Topics: Tax Filing Tips

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