LITTLE ROCK, Ark. — The April 18 tax filing deadline will be here before you know it.
The IRS backlog and child tax credit are among the changes resulting from the pandemic that could make completing your 2021 tax return a bit more complicated than in years past.
We turned to Jaye Gasaway, founding partner at Garland & Greenwood CPAs and Advisors in Little Rock, for tips on how to make the filing process seamless.
Here are his top four tips.
#1 If you didn’t receive your third stimulus check, claim it.
“You want to make sure that if you didn't receive the recovery rebate credit that you pick that up on your on your 2021 tax return,” Gasaway said.
The IRS issued the third and final stimulus payment in 2021. If you received just part or none of that stimulus payment, you can claim it on this return.
You just need to complete the Recovery Rebate Tax Credit worksheet. This won't result in a check in the mail, but it should increase your refund or decrease any taxes owed.
#2 Understand how the child tax credit could impact your refund.
Under the American Rescue Plan, the child tax credit increased and became fully refundable in 2021. The bill also allowed parents to receive half of their credit in advanced monthly payments.
They can now claim the other half on their 2021 tax return.
“It's imperative when you file your tax return that you get that reconciled correctly,” Gasaway said.
Some parents could get caught off guard by getting a smaller refund or owing the IRS more this year.
Gasaway said that should be expected if you received the full advanced payment and everything else remained consistent from 2020.
#3 File early and online
The IRS is backlogged with millions of pieces of unopened mail, so Gasaway suggests filing your tax return online.
“If you E-File, it's an automated acceptance by the IRS,” he said.
“If you have your banking information on there, they can auto direct deposit your tax refund. The earlier [you] file, that's just less tax returns that you have to compete with to get your tax refund back as expeditiously as possible.”
#4 Make sure everything on your return is complete and correct
“If you have incomplete or inaccurate information, that's going to delay the processing of your return,” Gasaway said.
“Then, you start getting notices and letters from the IRS. Trying to get those resolved is pretty difficult right now.”
And just a reminder: you don't have to go through this alone. Basic returns can be self-filed, and that's the cheapest option.
However, if yours is a little more complicated, with itemized deductions, it might be worth having a professional take a look or complete the return for you.