Three-quarters of all Americans receive an annual tax refund from the IRS, which is often the largest check a family receives each year. However, the IRS’s snarls in processing last year, when approximately 30 million Americans’ returns — and refunds — were held up, could happen again this tax season.
After the IRS begins processing returns on January 24, Treasury Department officials warned that this year’s tax season will be difficult. Since the IRS has had a big backlog from 2021, this is a major factor.
On December 23, the IRS had a backlog of 6 million unprocessed individual returns—a significant reduction from a backlog of 30 million in May, but significantly higher than the 1 million unprocessed returns that were more normal at the start of tax season.”
Taxpayers may be concerned about delays in 2022, but the IRS stated on Monday that most taxpayers should receive their refunds within 21 days of filing – with some conditions.
Math issues or improperly declaring how much you received in advance Child Tax Credit installments could result in weeks or even months of delays in filing your tax return. For example,
A speedy refund is more crucial than ever this year because the IRS is starting the filing season with a backlog. Tax experts say there are several things individuals can do to assist assure this.
Following Erin M. Collins’ testimony to Congress on the National Taxpayer Advocate’s concerns about the forthcoming filing season, which includes the backlog, on Wednesday.
As former IRS Commissioner Mark W. Everson noted, “the first thing you need to know if you’re going to make dinner is that the kitchen has to be cleaned up from the last meal. “It just spirals out of control.”
To make matters worse, tax preparers told CBS MoneyWatch that they couldn’t get through to IRS officials when they tried to call. Last year, according to Treasury officials, the IRS responded to less than 30 percent of the calls it received.
Christian Cyr, a CPA, president, and chief investment officer of Cyr Financial, says that in the old days, you had to wait 5 to 10 minutes for an IRS representative on the phone. His CPAs have had to wait for hours to speak with an IRS staffer, with no certainty that they will ever get through.
The average refund last year was around $2,800, so there’s a lot riding on a seamless tax return. Within 21 days of submitting your return, you can expect a check in the mail.
Make a backup copy in digital format
This year, the IRS strongly recommends that you take this step. Taxpayers who choose to file electronically are more likely to have their taxes processed more promptly than those who file paper forms, according to the agency.
As a result, the IRS relies on computers to handle electronic filings, whereas paper filings must be handled by human staff. Early on in the pandemic, the IRS closed its offices and personnel stopped reading mail, which caused a delay in the processing of paper return forms.
IRS personnel levels have not kept pace with the population increase, despite employee strain due to the pandemic. Despite a 60% increase in population, the size of the agency’s employees has remained static since 1970. That means a smaller staff to handle a larger volume of returns.
People filed paper tax returns for around 7 percent of the 148million returns in 2021 according to Taxpayer Advocate Service’s figures. Over 138 million taxpayers have already made the switch to electronic filings, and tax experts are encouraging more people to do the same.
It is “paper that is the IRS’s Kryptonite, and the agency is still buried in it,” Collins remarked on Wednesday.
Make a direct deposit for your refund.
In addition, the IRS recommends that people set up direct deposits for their refunds. In order to obtain your money as quickly as possible, the agency recommends combining e-filing with direct deposit to your bank account.
Last year, 95 million people received refunds, with 87 million of those people choosing direct deposit as their method of receiving their money.
According to the IRS, most taxpayers who file online and choose direct deposit will get their refunds within 21 days, assuming there are no issues with the return.
Don’t rely on a hunch.
The IRS compares its records with the information that taxpayers provide on their tax forms. An employee must manually evaluate a return if there is a discrepancy, such as when your W2 shows that you made $60,000 but your tax return states that you earned $58,000.
Your tax return could be delayed by many weeks or even months if that happens. So, tax experts recommend that consumers review their forms thoroughly to verify that they’re providing the correct information.
As Cyr put it, “word of mouth or the honor system” shouldn’t be relied upon while filing your tax return. “I’m certain that will lead to delays,” he says.
Do not throw away any stimulus letters from the IRS or the CTC.
Additionally, the IRS is mailing letters to those who received their third federal stimulus payment in 2021 and the accelerated child tax credit installments this month.
Taxpayers should keep these letters because they will tell them how much aid they received from these programs in 2021 and how they can use that information when preparing their tax returns.
Taxpayers who incorrectly reported the amount of their 2020 stimulus payments on their tax returns in 2021 were a major factor in the backlog of tax returns in 2021.
Everson’s advice was to avoid difficulties that were the result of carelessness on your part.
Two letters will be issued by the Internal Revenue Service (IRS):
- Informing taxpayers of their CTC payments in advance, Letter 6419 is being sent. There will be a continuation of the agency’s mailing of these letters in January.
- The third stimulus check is discussed in letter 6475. Late in January, we’ll deliver the letter to you.
Tax professionals recommend that you keep both of these letters and refer to them while completing your tax return.
Because these tax credits are time-consuming to claim, there may be a delay in receiving your refund.
It’s possible that even if everything is done correctly, there will still be some delays.
As of mid-February, refunds involving the EITC or the child tax credit can’t be issued until after that date, according to the Internal Revenue Service (IRS).
This extra period is provided by law in order to assist the IRS in preventing the issuance of false refunds, the agency stated this week.
A refund may not arrive within the 21-day window if your tax return includes one or both of these tax credits.
As a countermeasure to identity theft fraud, legislation passed in 2015 puts a hold on refunds for anyone who claims these credits. This is why the refund process is so sluggish for people who claim them.