The 2022 tax filing season is officially underway. With it comes several important pieces of information for taxpayers to consider. Below is a summary of what can be expected by filers come tax time.
The last two years have brought unprecedented changes to all aspects of life, and tax season is no different. While we have seen extended filing deadlines for the 2020 and 2021 seasons, the IRS currently has no plans to extend the due date for 2022. This year, the filing deadline is Monday, April 18, 2022 for individual taxpayers. While Tax Day typically falls on the 15th, it is pushed back this year due to Emancipation Day. Extended individual returns will be due on October 17, 2022. These dates are subject to change, but it is not recommended for taxpayers to rely on prior years as an example for what is to come.
The IRS has reported record backlogs from the 2021 filing season. This includes over 6 million unprocessed 2020 tax returns. Processing times are slower than usual due to these significant backlogs. As of early December 2021, all paper and electronic individual returns received prior to April 2021 have been processed so long as there were no errors that required further review. The IRS has instructed taxpayers not to wait to file their 2021 tax returns even if 2020 has yet to be processed.
As many taxpayers and practitioners may have experienced, calling the IRS for help with tax and account questions can be a difficult and lengthy process. It is recommended to first search the IRS’s website, for online resources before attempting to call. The IRS received more than 145 million calls in the first quarter of 2021, which is more than 4 times their normal call volume. Individual taxpayers can also create an online account where they can monitor the status of their return and make payments as well as view payment history.
Things to Consider
While taxpayers only have a certain amount of control over their returns once they have been filed, the following is a list of actions individuals can take to enable a chance for a normal processing timeframe–
1. Make sure to include all available information at the time of filing. This may seem obvious to some, however, a manual review by an IRS agent due to incorrect amounts reported on a tax return can cause significant delays in processing time.
This year, taxpayers will want to be especially diligent to report accurate amounts received from the Advanced Child Tax Credit and Economic Impact Payments (“stimulus payments”), where applicable. The IRS began sending Letter 6419 “2021 Advance CTC” in late December 2021 and will continue through January 2022. The IRS began sending Letter 6475 “Your Third Economic Impact Payment” to recipients in late January. It is imperative that taxpayers save these letters and provide them to their tax preparer. These amounts may also be viewed online with your online account if no letters have been received.
2. It is always recommended to file electronically when possible. Filing electronically helps minimize the amount of manual processing performed by the IRS.
3. Likewise, it is also recommended to utilize direct deposit. The IRS anticipates that most taxpayers will received their refunds (where applicable) within 21 days of filing electronically if they have opted for direct deposit.
As we have seen over the past two years, it is best to be fluid with expectations surrounding tax season and we should continue this practice into 2022. Please give us a call if you have any concerns or questions about your taxes that we could assist you with. 615-385-0686.