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Slow and steady is finally paying off for the Internal Revenue Service and taxpayers who've been waiting for their returns to be processed and associated refunds issued.

The IRS announced today (June 21) that by the end of this week, it should be finished with original 1040 forms filed in 2021.

That will take care of the remaining 8 million tax returns that were filed last year, but which had stacked up behind earlier COVID created office closure protocols.

More importantly to individual taxpayers awaiting refunds, that long-awaited money should soon be in their hands. At it will include some interest.

But don't go spending it just yet.

The finalized processing applies to returns for which IRS examiners don't have any questions or need extra information. In those follow-up situations, taxpayers should be getting correspondence with details on what it will take to finally wrap up the filing.

Added tasks on top of taxes: Last July, the IRS was facing 35 million unprocessed 2020 tax year returns. Most of those piled up while IRS employees were not able to come into offices during the height of the coronavirus pandemic.

Things got worse for filers and the IRS when the agency was given added COVID-related duties. While processing tax returns, the IRS also had to distribute pandemic-prompted economic impact payments and advance Child Tax Credit amounts.

The agency eventually shifted workers to help with the backlog. It also approved ongoing overtime for staff throughout 2022, created special teams of employees focused solely on processing aged inventory, and has begun expended hiring of thousands of new staff.

The combined approaches are finally allowing the IRS to see a bit of processing daylight.

More than 143 million returns have been processed overall, with almost 98 million refunds worth more than $298 billion being issued, according to the IRS. The agency also reports that as of June 10, it had processed more than 4.5 million of the more than 4.7 million individual paper tax returns received in 2021.

"Completing the individual returns filed last year with no errors is a major milestone, but there is still work to do," said IRS Commissioner Chuck Rettig. "We remain focused on doing everything possible to expedite processing of these tax returns, and we continue to add more people to this effort as our hiring efforts continue this summer."

In addition to finishing up last year's individual filings, the IRS said processing of business tax returns filed on paper forms in 2021 will follow shortly.

More returns in the queue: As is standard IRS operating procedure, all the filings will be processed in the order received. That's a constant process.

The IRS noted that it still is receiving current and prior-year individual returns and related correspondence as people file extensions, amended returns, and a variety of business tax returns.

And the backlog is still being felt, albeit not as acutely.

The IRS says it has worked through almost a million more returns to date than it had at this time last year. And a greater percentage of 2022 filings are original returns, which the IRS says generally take less time to process than amended returns.

But to date, according to the IRS, more than twice as many returns await processing compared to a typical year at this point in the calendar year.

Extensions to come: The millions of taxpayers who've yet to file 2021 returns will add to IRS processing issues.

If you have yet to file your 2021 tax return, which was due on April 18 unless you got an extension to file by Oct. 17 instead, the IRS encourages you to do so electronically. That will speed up the processing time.

If you're getting a refund — and yes, some folks who get extensions have overpaid their taxes — the agency also recommends you use direct deposit.

Where taxpayers e-file and have refunds delivered directly to bank accounts, the turnaround typically is 21 days or less if there are no errors on the filing.

Remember, too, that even though you have months to file your 2021 taxes, you don't have to wait until the October extension deadline. If you can complete the forms sooner, it will keep you from being part of the annual extension crunch.

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