Both taxpayers and the IRS will face some unique challenges when filing and processing federal tax returns for tax year 2021. To help you out, here are five tips that will help you avoid delays and ensure a smoother tax filing process for both sides.
1. Collect all tax documents before filing
To file the most accurate federal income tax return and avoid discrepancies, ensure you have received all the tax forms you need beforehand. You don’t want to omit a vital form accidentally! Make sure you’ve collected all the W-2s, Form 1099s, and any other tax documents detailing your income from last year before you file.
For tax season 2021, this tip is especially important for those who received stimulus payments or advance Child Tax Credit payments last year. If you did, you’d be receiving letters from the IRS detailing what amounts you received. You will need to input exact amounts when filing your return this year, so make sure you have these tax documents on hand when you file. Entering inaccurate info could result in costly delays and the potential to miss 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 tedious for both parties. If you want your return processed quickly, e-filing is the way to go this tax filing season if you have that option.
And here’s another tip — if you want that tax refund money in your bank account as quickly as possible, opt for getting your refund via direct deposit. Combined, these two steps will ensure swift processing of your return and your refund amount.
3. Find answers to tax questions online
It’s normal to have questions come up when you’re filing your income tax return.
If you need a tax question answered, we recommend looking up the answer to your inquiry online rather than calling the Internal Revenue Service. The IRS is still experiencing calls at record highs, resulting in lengthy phone delays.
Instead, try searching our blog for a helpful article or tax calculator related to your situation. The IRS also has a valuable collection of online tools that can assist you in everything from tracking your refund (Where’s My Refund?) to checking if you are eligible for certain tax deductions or credits.
4. Still waiting on your 2020 return to be processed?
You will need the adjusted gross income (AGI) amount from your most recent tax return to electronically validate and sign your e-filed 2021 tax return.
If you’re still waiting on your 2020 return to be processed and find yourself stumped at what to enter for last year’s AGI, you should just enter $0, according to the IRS.
A similar rule applies for those who used a Non-Filers tool last year to register for the third stimulus payment or the 2021 advance Child Tax Credit payments. You should enter $1 as last year’s AGI if you registered this way.