Here are Answers to your Question About What Information You Need To File a Tax Return
The Internal Revenue Service (IRS) said that the 2022 tax season begins on January 24, 2022. Taxpayers can start filing their 2021 returns on this day, and the IRS will also begin processing them. It is crucial to understand that the IRS will process complete returns without mistakes. And, for that to be the case, taxpayers must have all the information in hand when preparing and filing their tax returns.
While gathering all the information required to file a return, taxpayers must be aware of the impact of changes experienced during 2020 and 2021 because of COVID-19. The Economic Impact payments (EIP) and advance Child Tax Credit (CTC) are among the changes that will impact 2021 federal tax returns.
Below is most information required to file 2021 returns, including for taxpayers affected by the EIP and the advance CTC.
Personal information
Regardless of the situation during any tax year, personal information is a prerequisite for filing a federal return. Taxpayers must always start by gathering this information and ensure that it is correct before preparing and submitting their returns. Personal information that is required includes Social Security numbers (SSN) for the taxpayer and their spouse and those of their dependents. Other personal information required is the Individual Taxpayer Identification Numbers and Adoption Taxpayer Identification Numbers. There is also an additional requirement: this year’s Identity Protection Personal Identification Numbers (IP PIN), valid for the calendar year 2022. Each year, the IRS sends CP01A notices with a unique 6-digit IP PIN with instructions on how to use it.
Sources of income
Income information is crucial. Taxpayers must accurately report this to avoid delays on their refund or get a notice from the IRS. Those who earn all their money from wages and tips receive Form W-2s from their employers. This must be part of the tax return, detailing total income received during the year and taxes withheld. It will also reveal other information such as deferred compensation, dependent care benefits, contributions to a health savings account, and tip income.
If a taxpayer earned income through other means, they must seek relevant forms when preparing their return. For example, a taxpayer whose debt was forgiven must have 1099-C forms for debt cancellation. And those who received social security benefits must have an SSA-1099. A tax preparation checklist contains more types of forms required for different incomes. It can be downloaded HERE.
Deductions and credits
Tax credits and deductions are a huge part of every tax return. But the IRS will scrutinize most itemized deductions and claimed credits. To ensure that taxpayers do not risk having them thrown out, they must provide sufficient information backing their claims. For example, if a taxpayer plans to claim deduction costs, they must provide the SSN of the adopted child, records of legal parents, medical and transportation costs. The same applies for deductions on medical and dental expenses – a taxpayer will have to produce medical and dental records as proof that they incurred the costs during the tax year. Once again, a tax preparation checklist has a complete guide about the information required when claiming credits and deductions.
Additional information for recipients of advance Child Tax Credit and Stimulus Payments
Recipients of the advance CTC and EIP in 2021 will have to provide extra information on their 2021 federal return. Luckily, the IRS provides this information to help taxpayers report accurate numbers.
Those who received the advance CTC in 2021 have started receiving Letter 6419, 2021 advance Child Tax Credit, from the IRS. This letter contains information about the advance Child Tax Credit. It has the correct amount that taxpayers received.
Taxpayers who received the third EIP will start Letter 6475, Your Third Economic Impact Payment, in late January 2022. It will help taxpayers who missed the third EIP determine if they must claim the Recovery Rebate Credit (RRC) on their 2021 tax return.
Issuing of refunds
The IRS will start issuing refunds when they complete processing tax returns submitted from January 24, 2022. Therefore, the earlier taxpayers prepare to file and submit, the earlier they receive their refund. However, if a taxpayer receives the Earned Income Tax Credit (EITC) or Additional Child Tax Credit, the IRS cannot issue them a refund before Mid-February. This extra time helps the IRS to investigate and stop fraudulent refunds from being issued. For any questions regarding this tax season, taxpayers should contact Folasade, the Accountability Accountant®, on (202) 618-1297.
People have also asked the following
- When can I expect to file my federal tax return?
The 2022 tax season begins on January 24, 2022. Taxpayers can start submitting their returns then, and the IRS will process them.
- Why is my federal refund still processing?
Refunds are given as soon as the IRS completes processing returns in question. However, some refunds get delayed because IRS agents will need more time to assess a taxpayer’s return regarding itemized deductions and other credits claimed. More so, math errors resulting in inconclusive income and expenses may further delay a taxpayer’s refund. EITC and additional CTC recipients naturally wait longer for refunds as the IRS investigates to avoid fraudulent refunds from being issued.
- How do I get my full federal tax refund?
IRS works on the taxpayer’s instruction. Choosing direct deposit for the refund when filing a return means a taxpayer gets the full amount in their bank account. If not, IRS will send a check to their mailing address.
Also, a taxpayer gets a full refund if the IRS assesses their return and finds out they owe no more taxes than they already paid.
- Is tax refund taking longer this year?
It should not take longer unless if a taxpayer submits an incomplete return.
- How long does it take to get a refund approved?
A tax refund can be approved as soon as the taxpayer’s return has been assessed and completed by the IRS. If it takes longer, some investigations may be going on with IRS agents. Sometimes they will contact the taxpayer with questions; sometimes, they don’t.
