Navigating the Tax Maze

Dawn Rye | Writer

Will the 2022 tax filing season be conventional? Covid-19 will still be a concern, several stimulus tax laws will still be challenging, and new tax laws may vary or add more complexity to the filing process. The IRS will start accepting income tax returns between Jan. 24-Jan. 31, 2022.

However, the IRS encourages taxpayers to get informed about filing their federal tax returns in 2022. In other words, be ready to have your taxes filed (or an automatic extension filed) by Monday, April 18. 

In general, the IRS says that returns with refunds are processed and payments are issued within 21 days. For paper filers, however, this can take much longer. The IRS and tax professionals strongly encourage electronic filing. Taxpayers who mail a paper version of their income tax return can expect at least a three to four week delay at the front-end of the process, as the return has to be manually entered into the IRS system before it can be processed.

According to IRS.gov, organized tax records make preparing tax returns easier. Taxpayers will need to include the W-2 from your employer(s), 1099 from banks, unemployment compensation, dividends, distributions from a pension, annuity, or retirement plan. Other forms needed may include Form 1099-K, 1099-MISC, 1095-A, Health Insurance Marketplace Statement, or others to reconcile advance Premium Tax Credits for Marketplace coverage.

Letter 6419, 2021 Total Advance Child Tax Credit letter 6419 reconciles all payments. Letter 6475, the 2021 Economic Impact Payment, determines whether you’re eligible to claim the Recovery Rebate Credit.

Advance child tax credit payments

Families who received advance payments will need to compare the advance child tax credit payments they received in 2021 with the amount of the child tax credit they can adequately claim on their 2021 tax return. Taxpayers who received less than the amount for which they’re eligible will claim a credit on their 2021 tax return.

The child tax credit for 2021 is up to $3,600 for children under six (up to $3,000 for children ages 6-17). From July to December, qualified families received up to 50 percent of their child tax credit as monthly payments. Some families can claim the remaining amount on their 2021 tax returns.

In January 2022, the IRS will send Letter 6419 regarding child tax credit payments. The IRS encourages taxpayers to keep any information mailed with their tax records. Individuals can also create or log in to IRS.gov online account to securely access their child tax credit payment.

Economic impact payments and claiming recovery credit

Individuals who didn’t qualify for the third economic impact payment or did not receive the total amount may be eligible for the recovery rebate credit based on their 2021 tax information. They’ll need to file a 2021 tax return, even if they don’t usually file, to claim the credit.

Individuals will need the amount of their third economic impact payment and any plus-up payments received to calculate their correct 2021 recovery rebate credit. 

In early 2022, the IRS will send Letter 6475 that contains the total amount of the third economic impact payment and any plus-up payments received.

The chart shows when a taxpayer is likely to receive a refund based on the information. If your IRS income tax refund is delayed after you’ve filed, ask your tax professional, or use the “Where’s My Refund?” tool on the IRS website. Or download the IRS2Go app to check your refund status.

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