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Tax statements you need to file your 2021 return

Tax Season 2022 starts Monday, Jan. 24; Free File opens earlier, on Jan. 14


It's official. The Internal Revenue Service just announced that it will begin accepting and processing 2021 individual tax returns on Monday, Jan. 24.

Yes, I realize some eager taxpayers have already e-filed their personal tax year 2021 Form 1040s. That's OK. But you still have to wait. The IRS has placed them in a holding queue, and won't start processing them until the official Jan. 24 start of the tax season. But at least that tax task is off your 2022 to-do list.

And yes, more will file on Jan. 14, which is when the IRS' partnership with some tax software preparation companies will open. Participating Free File providers will accept completed returns beginning that Friday, and hold them until they can be filed electronically with the IRS.

And a third yes, I've added those dates to my post on the 2022 tax year calendar. More on this later. Now back to the Jan. 24 kickoff of this year's filing season.

Computer systems will be ready: IRS officials said they will have completed their systems' updated programming and testing by the start of the last full week of January.

This includes the computer data that will allow filers to claim the correct Child Tax Credit balance they are due if they got advance credit payments last year.

COVID-19 relief payment amounts also will be reflected so taxpayers can claim any remaining stimulus money as a Recovery Rebate Credit when they file their 2021 tax returns.

"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," said IRS Commissioner Chuck Rettig in announcing the 2022 tax season start.

2020-2021 clean-up still ongoing: I know, I know. I can read the tax room.

Some of you are continuing to fight deal with the IRS, trying to get refunds you are due.

Tax professionals also are still stuck on phone hold as they attempt to sort out the backlog of clients' problems — late or still undelivered refunds, payment demand notices sent while mailed money sat in unopened envelopes in IRS offices, and more — created over the last two years by the collision of COVID-19 and the U.S. tax system.

Rettig acknowledged the issue in the 2022 filing season announcement.

"In many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, for IRS employees and for me," Rettig said. "IRS employees want to do more, and we will continue in 2022 to do everything possible with the resources available to us. And we will continue to look for ways to improve. We want to deliver as much as possible while also protecting the health and safety of our employees and taxpayers. Additional resources are essential to helping our employees do more in 2022 – and beyond."

He also said the agency is working on reducing the inventory of prior-year individual tax returns that have not been fully processed. At the end of 2021, the IRS had processed nearly 169 million tax returns, according to the commissioner. Additionally, all paper and electronic individual 2020 refund returns received prior to April 2021 have been processed if the return had no errors or did not require further review, he said.

So that's where we are, for better or worse, as we head into the now official start of the 2022 filing season.

Old filing season tips reiterated: As Rettig noted, much of the COVID delay was from paper forms that stacked up when the agency closed campuses at the height of the COVID-19 pandemic in 2020.

To avoid a similar situation and to help taxpayers and the IRS, the agency emphasizes two pieces of usual filing advice.

First, submit your return electronically.

If you use a tax preparer, that person will likely e-file your return. If you do your own taxes, either using online or purchased package software or by using those programs still participating in Free File (I'll have more on this option in a future post), e-filing is part of the process.

Second, if you're due a refund, provide financial institution information with your return so the money can be directly deposited.

Added COVID-related tax tips: The IRS also points out a couple key COVID-19 tax areas where filers should pay added attention.

The American Rescue Plan Act (ARPA) that became law last March provided ways for folks dealing with coronavirus caused economic setbacks to get some added money. These includes a third Economic Impact Payment (EIP) and early delivery of up to half of the enhance 2021 Child Tax Credit amount. If you got either, to get any remaining relief you are due, you need to correctly report how much you got early.

The IRS has and/or is still delivering letters to recipients of either or both of those 2021 payments. The notices will provide the amount of money the IRS sent as advance tax credit payments.

Millions of families got half of the 2021 Child Tax Credit (CTC) amount as monthly payments last July through December. That was $1,800 for each child younger than age 6, and $1,500 for each youngster ages 6 to 17. They can claim the remaining CTC half on their 2021 tax returns.

Taxpayers who got less than that or no advance credit money at all, can claim those amounts, too.

As for the 2021 EIP money, if you're eligible for more than you received last year, you can claim that tax break as the Recovery Rebate Credit.

Again, in both credit cases, use the information provided in the IRS mailed notices — Letter 6419 for the CTC, and Letter 6475 for the EIP.

File even if not required: Finally, even if you didn't make enough money last year to require you file a 2021 return, it could be a good idea to do so.

If you're due the balance of your advance CTC, it's the only way to get that remaining money.

Similarly, if you qualify for an EIP you didn't get in 2021, the only way the IRS will send you the money is if you file a return.

Plus, you might find you are eligible for other tax breaks, such as the Earned Income Tax Credit (EITC).

And another bonus is that if Congress authorizes additional relief for 2022, the IRS will have your data on hand so that it can more quickly send you the money directly.

Tax Day(s) 2022: Finally, while the filing season officially starts in a couple of weeks, most procrastinators have until April 18 to get their 2021 returns (or extension requests) to the IRS.

That's Tax Day 2022.

It's a couple of days late because the usual April 15 deadline this year is the Emancipation Day holiday in Washington, D.C. Federal law states that when there's holiday in the District of Columbia that impacts tax due dates, the tax deadline is moved to the next business day. That's Monday, April 18, in 2022.

Maine and Massachusetts filers get an extra day. Taxpayers in those New England state have until Tuesday, April 19, to file their returns thanks to the Patriots' Day holiday there.

And if you do get an extension, that deadline is a bit later this year, too. It's Monday, Oct. 17, because Oct. 15 is on Saturday.

As noted at the start of this item, you can read about all these tax deadlines, including the just added Jan. 24 start of this year's filing season, in my earlier post Important tax dates in 2022.

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Taxes were all fun and games until they found their way into Venmo and PayPal… oh well. Great blog though, as always.

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