Millions of Americans are expecting a tax return this year. The IRS has a request to help those who want to get their money quicker: Please file your return electronically as soon as you can.
The IRS recently reported that nearly three quarters of filers received a refund for their taxes last year. This was an average of $2,800 per household, which is a significant influx of money for many Americans who depend on it.
Already, the IRS warns of a "challenging" season for tax returns that could cause delays and complications for taxpayers. This is due in large part to the avalanche of unprocessed paper tax returns that the IRS is currently working through. At December's end, 6 million individual IRS returns were still unprocessed. This is a significant increase on the usual 1 million returns it has at the start of tax season.
Taxpayers can take certain steps to help get their money back quicker. Experts recommend that taxpayers file their tax returns quickly. They don't need to have filed previous returns to be able to submit their 2021 returns. To avoid delays, Americans should file electronically by direct deposit to receive their returns within 21 days.
You can track the status of your refund if you file electronically, as most taxpayers do. This is possible within 24 hours of filing the IRS' Where’s My Refund tool.
For taxpayers who file their tax returns by mail, it could take up to four weeks to see your payment status online.
Yet, many taxpayers end up waiting for refunds for much longer than 21 days. This is often due to simple math errors on their tax returns, or identity theft delays.
Eric Bronnenkant is the head of tax at Betterment. This is to avoid tax fraud. Fraudsters can find someone's Social Security Number, file an illegal return on their behalf, and then claim the refund.
Bronnenkant stated that the best way to prevent someone from filing an illegal return is to file as soon and as quickly as possible.
The IRS and individual filers face new challenges this year. Taxpayers will need to include the monthly child tax credit payments as well as the stimulus checks received in 2021 in their returns. This will further complicate matters and increase the chances of errors and delays in processing returns.
Bronnenkant stated that if you receive a tax credit and need to reconcile it when you file, you will want to ensure that the correct number is entered when you file. Otherwise, that could delay your return or prevent you from getting any refunds that you may be entitled to. It will help to reduce friction when filing by knowing what payments you received up front and recording them appropriately.
The IRS will send a letter to families that received monthly installments last year of the boosted Child Tax Credit. It is called and informs them about the amount of advanced payments they received as well as the number of children who were used in calculating the payments.
The enhanced credit should be kept by the recipients to ensure that the correct reconciliation of the credit received in their tax returns for the year 2021 is done. This information is important to determine how much money families will receive from the credit.
Last week, Chuck Rettig, IRS Commissioner, stated that there are steps people can take in order to avoid delays and receive their tax refund as soon as possible. We urge taxpayers to review their tax returns for accuracy before they file. They should also file electronically via direct deposit, if possible. A paper tax return could result in a longer refund delay.
The IRS expects that the money will be received within 21 days if taxpayers submit an electronic return without any issues and choose to receive the refund via direct deposits.
For most taxpayers, the tax-filing season will close on April 18, rather than the usual April 15 deadline. This is because Emancipation Day in Washington, D.C. will be observed.
