TYLER, TX (EAST TEXAS NEWS) – Monday marked the first day of tax season, and the IRS warned it could be a busy one. The agency is facing a backlog of millions of returns filed last year, and they say pandemic-related changes could cause even more chaos.
“I am a CPA, so my expertise lies in public accounting and taxes,” said Jennifer Reynolds, accounting professor at UT Tyler’s Soules College of Business. She noted that this year’s filing season comes with notable changes, such as the advance payments of the child tax credit. The IRS advises parents not to discard a mailed document called Letter 6419.
“For the first time in history, Congress issued advance payments of the child tax credit. Therefore, taxpayers will need that form to see how much they’ve already received; report it, and then they can claim any remaining portion of the credit owed to them,” Reynolds explained. “In fact, some taxpayers may even have to repay that amount if they received an advance and were not eligible to receive it.”
Another item to note: the third round of stimulus money that arrived last spring.
“So, the stimulus payments aren’t taxable, but people will want to locate that form. Some individuals may still be eligible to claim the Recovery Rebate Credit if they did not receive the stimulus payment last year, and they can claim that credit by filing their 2021 tax return. Even if they owe no taxes or hadn’t planned to file one. They’ll still want to file to be able to obtain that credit.”
And all these differences from years past arise as the IRS begins this season amid a substantial backlog, prompting experts like Reynolds to urge early, electronic filing.
“File your return electronically in advance and use direct deposit if you’re due a refund,” she advised. “But another recommendation would be to perhaps seek the guidance of a CPA if you haven’t done so in previous years. There are so many changes and complications that are specific to the 2021 tax year.”
Another change: the IRS is allowing people to deduct a charitable contribution even if they claim the standard deduction, according to Reynolds.
The filing deadline for Texans is Monday, April 18. Click here to learn the five key things you should remember when filing 2022 income tax returns, according to the IRS.
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