The IRS and taxpayers will face some unique challenges when filing and processing federal tax returns for tax year 2021. Here are some tips for avoiding delays and ensuring a smooth tax filing process for both you and your accountant.
1. Collect all tax documents before filing
Ensure you have all of the required tax forms before filing your federal income tax return, in order to avoid discrepancies. Make sure you don’t miss a vital form! Make sure you collect all the W-2s, form 1099s, and other details about your income from the previous year before you file.
Those who received stimulus payments or advance Child Tax Credit payments last year should take this tip into account for tax season 2021. The IRS would send you a letter detailing what amounts you received if you did. You will need to input exact amounts when filing your return this year, so be sure to have these documents handy when you do. Incorrect information could lead to costly delays and the potential to lose out on valuable tax credits.
2. E-file your return and use direct deposit to prevent refund delays.
Filing paper returns by mail is more cumbersome for both parties. Taking advantage of the e-filing option is a good way to expedite your tax return this filing season.
Another tip – if you want your tax refund money in your bank account as quickly as possible, choose direct deposit. By combining these two steps, you can be assured that your refund will be processed swiftly.
3. Find answers to tax questions online
When you file your income tax return, you are likely to have questions.
If you have a tax question, we recommend looking up the answer online rather than contacting the Internal Revenue Service directly. There are still record numbers of calls being placed to the IRS, resulting in lengthy phone delays.
We recommend searching our blog for articles or tax calculators that are relevant to your situation. Additionally, the IRS has a number of useful online tools to assist you with everything from tracking your refund (Where’s My Refund?) to determining whether or not you are eligible for certain tax credits or deductions.
4. Still waiting on your 2020 return to be processed?
Your most recent adjusted gross income (AGI) amount will be needed to electronically validate and sign your 2021 tax return.
Those of you who are still awaiting the processing of your 2020 tax return and are unsure what to enter for last year’s adjusted gross income should simply enter $0, according to the IRS.
This rule also applies to those who registered last year for the third stimulus payment or the 2021 advance Child Tax Credit payments by using a Non-Filers tool. You should enter $1 as last year’s AGI if you registered this way.
Feel free to reach out to us if you have any additional questions about filing your tax returns.