Credello: Change is something we've all become accustomed to in the past few years. It all started in 2020 with a global pandemic. That was followed by the vaccine race, Covid variants, and an economic recovery that is still underway. Have you had enough yet? Brace yourself. The IRS has more change in store for you this tax season. Tax Day 2022 is right around the corner.
Before you start scrambling for tax debt consolidation options, take a deep breath and review the information in this article. Yes, there are changes in the IRS system this year, beginning with filing dates. There are also some adjustments to the child tax credit and some additional lines on your tax return about a recovery rebate credit. Here's how it all breaks down:
1. Changes in Filing Dates
Tax filing season begins this year on January 24th and the deadline is April 18th. Mark those down on your calendar. The start date is later because the IRS is testing new programming and it's still processing 2020 returns. Electronic returns should go through without too much of a delay. Paper filings are not recommended this year if you can avoid them.
2. The Advance Child Tax Credit and Letter 6419
The most significant change from last year is the advance Child Tax Credit. Some taxpayers received a portion of this credit in 2021 and now need to account for it on their annual tax filing. To assist with that, the IRS is sending out Letter 6419. It shows the total amount of 2021 advance payments and includes instructions on how to report them.
3. Recovery Rebate Credits and Letter 6475
The stimulus checks sent out by the US Government last year were tax-free, so the general assumption is that they don't need to be reported on this year's tax filing. That's only partially true. Americans who did not receive the full amount of the third economic impact payment will get a tax credit. That's explained in Letter 6475, which is being sent out by the IRS this month.
4. IRS Free File Opens on January 14th
For those who want to avoid the inevitable logjam that is likely to happen in March and April, the IRS is opening its "Free File" electronic filing option on January 14th. It's available to individuals who made less than $73,000 last year. The tax preparer will complete the return and hold it until it can be electronically filed on January 24th.
The Bottom Line: There's More Complexity in This Year's Tax Filings
With the advance child tax credit and credits for economic relief payments, this year's tax filing will be more complex than in years past. There are also changes in the tax code that change certain deductions and eliminate others. Keep in mind that this is the first year under a new presidential administration so you may see some surprises. Be prepared. Start early and file electronically. The IRS is backlogged, and their system is new. Expect delays.
Press Release Service by Newswire.com
Original Source: Tax Day 2022: All About Tax Filing Start Date and End Date
