The 2021 tax season is here and it could be an ugly season. The Internal Revenue Service (IRS) continues to face budget cuts and staffing issues due to covid. In addition, they have been tasked with distributing the federal checks to taxpayers during Covid as well as the child care credit checks. It has overwhelmed them and they are very much behind in processing tax returns on a timely basis.
Ways to Help Potentially Speed Up the Process
National Taxpayer Advocate Erin M. Collins has some suggestions to make this tax season easier.
- File your taxes electronically. It is the easiest way to reduce the chances of your refund being delayed.
- Use direct deposit if you are getting a refund.
- Make sure the information you enter on your tax return for the child tax credit and the third stimulus check is consistent with the IRS information. The IRS is sending letters with this information.
I should point out that refunds last year took a lot longer to be issued due to the IRS backlog, and indications are that this year won’t be much better. So if you are planning to use that money for something, don’t count on seeing it as quickly as it was in the years prior to the pandemic.
Tax Code Changes Aren’t Helping the Problem
There are lots of changes to the tax code for 2021 and it can be overwhelming. If you are using a professional to prepare your taxes here are some tips from Collins.
- Use a licensed preparer – a certified public accountant (CPA) or an enrolled agent (EA).
- Qualifying older taxpayers can use the IRS’s Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly service for free.
Get the Paperwork In Order This Tax Season
To reduce the time it takes for your tax professional to prepare your taxes, it is important to provide all of the applicable tax documents (W2, 1099, donation receipts, medical receipts, etc.) to the professional during your first meeting. This will reduce the need for the tax professional to wait for you to provide a missing piece of information. Triad Personal Paperwork can assist you in gathering all of these items. Contact us for more information about how we may be able to help you.