Tax Season Has Begun: Everything To Know Before You File Your 2021 Tax Return
Learn what’s new for taxes in 2022, including this year’s tax deadlines, extensions and when to expect your refund.
The IRS has already started accepting tax returns this year.
Federal income taxes are once again due in April. After postponing deadlines in 2020 and 2021 because of the COVID-19 pandemic, the IRS set April 18, 2022, as the deadline for filing a federal tax return this year. The 2022 tax season officially started on Jan. 24, the first date IRS began accepting returns.
For many Americans, this year’s returns will be more complex because of job or residency changes, stimulus payments, child tax credits, unemployment insurance claims or other COVID pandemic factors.
“The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don’t face processing delays,” IRS Commissioner Chuck Rettig said in a statement.Here are important dates for the 2022 tax season — including when state taxes are due, the deadline for an extension and when you can expect a refund — plus tips for a smooth and speedy filing experience.
For more, learn about tax deductions you don’t want to miss, the tax best software for 2022 and how to file your taxes for free.
Stimulus Checks And Us Tax Filing In 2021
A new line has been included on the new 2020 draft Form 1040 for the Recovery Rebate Credit .
Even without another Coronavirus relief package, some Americans may receive another economic impact payment in 2021. Newsweek
As the value of stimulus payments was calculated using previous years tax returns, some Americans didnt qualify in previous years, but can evaluate again based on their income in 2020 . These expats will therefore receive a stimulus payment in 2021.
Conversely, some Americans qualified and received a payment based on their 2018 or 2019 tax return, but wont qualify based on their 2020 income. Thankfully though, these folks wont have to refund the stimulus payment they have already received.
What If You Didnt File A Tax Return In 2018 Or 2019
- If you should have filed a tax return and didnt, you will need to file a 2020 tax return. You will also want to catch up on your missed tax returns to avoid other penalties for not filing.
- If you dont need to file a tax return and receive Social Security and Railroad retirement benefits, the IRS will use those records. However, the IRS wont know if you have dependents and are eligible for the $500 per dependent. So if you believe youre owed more money, you can file a 2020 tax return.
- If you have a problem and cant file either 2018 or 2019 without in-person assistance, you will not be able to claim your check immediately but can get it through the end of 2020 after you file.
- If you just had a baby in 2020 , you may be eligible to claim the dependent payment for your baby. Their birthday doesnt matter because its based on the tax year. A baby born on December 31, 2020 could be eligible for both payments.
If you otherwise wouldnt have needed to file a 2020 tax return, this doesnt mean that you are going to owe other taxes. Normally, you wouldnt need to file because you wouldnt owe the government money and the government wouldnt owe you money. Since the government owes you money in the form of a tax credit, you need to file a tax return to claim it.
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How Long Will It Take To Get My Refund
If you qualify for a tax refund, the IRS aims to get it to you within 21 days of receiving your electronically filed return . But the agency is already warning that processing and issuing refunds could be delayed this year.
Covid-19 changes are to blame, as are staffing shortages, out-of-date technology and taxpayer errors that need to be manually corrected. In fact, the IRS is still processing some returns from last year.
The sooner you submit your return, the sooner you should get your refund, in theory. That said, any mistakes like claiming a credit you don’t qualify for or claiming the wrong amount will slow down the refund process.
Do I Qualify For The Stimulus Payments
You can receive stimulus payments if you have a Social Security Number, even if you make little or no money.
Generally, the children in your family qualify for the first two stimulus payments too if they are under 18 and live with you most of the year. You can receive the third stimulus payment for any family member who is your dependent, even if they are not a child.
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What’s The Deadline For Filing Your 2021 Tax Return With The Irs
The deadline for filing federal taxes for most taxpayers is Monday, April 18, 2022. That’s because April 15 is recognized as a holiday, Emancipation Day, in Washington, DC.
“By law, Washington, D.C., holidays impact tax deadlines for everyone in the same way federal holidays do,” according to a statement from the IRS.Taxpayers in Maine and Massachusetts, however, have until April 19, because of the observance of Patriots’ Day in those states.
The IRS expects more than 160 million individual tax returns this year, with the vast majority coming before the April deadline.
Do I Have To Include My Third Stimulus As Income
No. The Economic Impact Payment is not considered to be taxable income. “And you shouldn’t report it as income on your 2021 federal income tax return,” according to Letter 6475.
You also do not need to repay any of the third stimulus payment money that you received. That’s true even if you’d qualify for a smaller payment based on what you’d calculate for your 2021 Recovery Rebate Credit.
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Getting Ready To File
Depending on your situation, there may be free or low-cost options for filing your tax return. If youre not preparing and filing your return yourself, its important to choose a reputable tax preparer that will file an accurate return. Any mistakes could result in additional costs and complications in the future including delays in receiving any tax refund.
You can get free tax preparation assistance by IRS-certified volunteers at a Volunteer Income Tax Assistance or a Tax Counseling for the Elderly location if:
- Your income is $57,000 or less
- You are 60 years old or older, or
- You have a disability or speak limited English
If youre not eligible for VITA, TCE, or theres not a site in your community, here are additional free resources available for filing your tax return:
- If you earned less than $73,000 in 2021 and would like assistance so you can prepare and file your own return, you can get support with free tax preparation or software through MyFreeTaxes
- If youre a member of the military or a military dependent, you can get free tax help from the Military OneSource program
- If you are not eligible to file at a VITA or TCE site, or if there is not a site nearby, there are also other free resources available for filing your tax return. If your income is more than $73,000, you can still through the IRS.
What If Your Income Changed
If your 2020 income goes down, you may be eligible for more money when you file your 2020 tax return. You may be eligible if you had a life change that meant you are eligible based on your 2020 tax return but werent eligible based on 2019 or 2018.
If your 2020 income went up, you wont have to return your economic impact payment.
The same thing will apply for the 2021 payment and your 2021 tax return.
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When Will I Get The Recovery Rebate Credit
You will most likely get the Recovery Rebate Credit as part of your tax refunds. If you electronically file your tax return, you will likely receive your refund within 3 weeks. If you mail your return, it can take at least 8 weeks to receive your refund.
Claiming the Recovery Rebate Credit will not delay your tax refund. However, if you dont claim the correct amount of the Recovery Rebate Credit, your refund may be delayed while the IRS corrects the error on your return. The IRS will send you a notice of any changes made to your return.
You can check on the status of your refund using the IRS Check My Refund Status tool.
You Can Start The Clock On The Statute Of Limitations
The IRS generally has three years from the date you filed to audit your tax returnsix years if your return includes a substantial understatement of income. But if you dont file a tax return, the clock on that statute of limitations never starts running. In effect, the IRS could come after you in a decade or more and claim that you should have filed a return.
If youre worried about an IRS audit, you may want to file a tax return even if you didnt earn enough to trigger a filing requirement.
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Who Else Could Get A Late Stimulus Check In 2021
There are several other scenarios in which expats might receive a late stimulus check in 2021:
Americans who dont file a tax return as they dont meet minimum income thresholds and who didnt let the IRS know using the online non-filers tool by midnight on October 15th 2020.
Americans who were claimed as a dependent on someone elses 2019 tax return, but file their own return for 2020.
Americans abroad who received a paper stimulus check that they cant pay into a foreign bank should return the voided check and they will receive a credit on their 2020 tax return in 2021.
American expats who are behind with their US tax filing because they werent aware that they had to file, but now catch up under the voluntary IRS penalty-free Streamlined Procedure amnesty program.
Things To Know About The 2021 Stimulus Payments
> > > To find out the status of your third stimulus , use the IRS’ Get My Payment tool .
On March 11, 2021, President Biden signed the American Rescue Plan into law, which provided essential financial relief to individuals and families along with COVID-19 relief to states and localities. One component of the package is a third round of stimulus payments. Despite wide news coverage about these payments, many have questions about whos eligible and how to receive them. The third round also has different eligibility rules than the first and second rounds of payments, which were distributed earlier.
Below are ten things to know about the third round of paymentsincluding information on filing your 2021 taxes if you missed any or all of your payment:
1. The payments were $1,400 per qualifying adult and $1,400 per dependent. For the third round of stimulus payments, taxpayers could get payments for dependents of all ages, including children over the age of 17, college students, and adults with disabilities. The taxpayer received the payment on behalf of the dependent, although financially independent college students and young adults who are not claimed as a dependent may be eligible for their own payment. The payments were an advance against a new credit for tax year 2021. Filers can claim the payment, which is called a Recovery Rebate Credit, on their 2021 tax return if they didnt already receive the full amount. These payments will not affect eligibility for other tax credits.
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Am I Eligible To File A Tax Extension
If you’re planning to file a tax extension this year, you’ll need to submit Form 4868 to the IRS either by paper or electronically using e-file before the April 18 deadline. Note that you’ll still have to pay all or part of your estimated income tax due using Direct Pay, the Electronic Federal Tax Payment System, or using a debit or , and note that you’re filing for an extension.
Some taxpayers are automatically granted more time to file. This includes military personnel who are serving in a combat zone or persons in federally declared disaster areas.
Will The Monthly Payments Affect Your Tax Refund
The child tax credit payments you got this year could potentially affect your taxes . Here’s how:
- You received an overpayment and the IRS didn’t adjust the amount on later payments. You’ll have to pay this back.
- You received payments you didn’t qualify for. You’ll have to pay the IRS back.
- Your income changed, and you didn’t report it to the IRS. This could result in a larger or smaller tax refund or you owing the IRS, depending on if your income was higher or lower than what the IRS used to calculate your payment.
- You opted out of the payments last year, so your payout will be larger this year.
- You received money for a child who turned 18 last year. You may have to pay that money back.
Your taxes could be affected by the child tax credit payments.
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What Is The Fastest Way To Get Stimulus Payment And Tax Refund
File electronically, instead of a paper return, to avoid delays. Make sure the return is accurate, reflecting complete information regarding the advance payments for the child tax credit and the third stimulus payment. Have your tax refund directly deposited into a bank account to avoid mail delays.
How Long Will It Take To Get My Money
A worker shortage, an enormous workload from administering pandemic-related programs and stalled legislation that would have given the agency billions of dollars for more expeditiously processing returns will combine to cause taxpayers pain this filing season.
Because of this, the IRS is asking people who can to file electronically . The agency reports paper returns could take several weeks longer this year.
According to the IRS, people who Efile usually receive their refund within three weeks of the date the IRS receives their return.
People who set up direct deposits are also expected to get theirs faster. If you mail a paper tax return, it can take 6 to 8 weeks to process the return and possibly longer due to staffing issues.
The IRS notes that filing a complete and accurate return will help streamline the process. Taxpayers are encouraged to check IRS.gov for the latest on questions around advance payments of the Child Tax Credit, claiming a Recovery Rebate Credit for missing stimulus money and other issues.
Antsy and just cant wait to see that larger number in your account? You can always check the progress of the refund using the IRS Wheres My Refund tool.
The Associated Press contributed to this report.
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How Much Is The Recovery Rebate Credit For 2021
This tax season, you want to make sure that you’ve received the full amount of the third stimulus that you’re entitled to receive. You need to file a 2021 federal income tax return to claim the Recovery Rebate Credit if you’re owed more money.
The maximum Recovery Rebate Credit on 2021 returns amounts to $1,400 per person, including all qualifying dependents claimed on a tax return. A married couple with no dependents, for example, could qualify for up to $2,800.
Tax Filing Season Begins Jan 24 Irs Outlines Refund Timing And What To Expect In Advance Of April 18 Tax Deadline
IR-2022-08, January 10, 2022
WASHINGTON The Internal Revenue Service announced that the nation’s tax season will start on Monday, January 24, 2022, when the tax agency will begin accepting and processing 2021 tax year returns.
The January 24 start date for individual tax return filers allows the IRS time to perform programming and testing that is critical to ensuring IRS systems run smoothly. Updated programming helps ensure that eligible people can claim the proper amount of the Child Tax Credit after comparing their 2021 advance credits and claim any remaining stimulus money as a Recovery Rebate Credit when they file their 2021 tax return.
“Planning for the nation’s filing season process is a massive undertaking, and IRS teams have been working non-stop these past several months to prepare,” said IRS Commissioner Chuck Rettig. “The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don’t face processing delays. Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year. And we urge extra attention to those who received an Economic Impact Payment or an advance Child Tax Credit last year. People should make sure they report the correct amount on their tax return to avoid delays.”
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Expect Delays This Tax Season
Like in 2021, it could take longer than usual to receive your tax refund this year.
I think the IRS has done a service by warning people upfront about what the process is going to be like this year, says , a senior fellow at Urban-Brookings Tax Policy Center. But its not the position that anyone would want their tax agency to be in.
Advance Child Tax Credit payments, stimulus checks, and other changes to the tax code as a result of the pandemic will drive this years delays, Holtzblatt says.
The best way to avoid delays is by using direct deposit to get your tax refund faster and avoid errors in your return.
Its critical this year to avoid a paper tax return whenever possible and file electronically with direct deposit, IRS Commissioner Charles Rettig recently said in a statement. And its more important than ever to make sure youre filing an accurate tax return.