Prepare for your 2021 Tax Return with These Tips
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It’s time for tax season! Tax filing began on January 24, which means it’s time to get prepared.
These tips can help the 2021 tax return process go a bit more smoothly.
1. Submit tax information as soon as possible.
The sooner you gather and provide your documents, the sooner your tax advisor can start on your tax return and give it the attention it deserves. Please submit all tax information by March 15 to decrease the changes of needing an extension.
2. Do not throw away letters from the IRS.
Taxpayers who received advanced child tax credit (CTC) payments or a third-round economic impact payment will receive letters from the IRS.
The CTC letter was sent in December or January. It includes the total amount of child tax credit payments received in 2021 and can be used to determine any remaining amount of the child tax credit that can be claimed on the 2021 tax return. Taxpayers who received advanced payments can also use the CTC Update Portal on IRS.gov to check payment amounts.
The economic impact payment letter will be sent out in the middle of January. It applies to the third round of “stimulus check” payments that were distributed from March through December 2021. The letter will show the amount received and could be used to help eligible taxpayers claim the 2021 recovery rebate credit.
If you receive these letters, save them, and submit to your tax advisor. They contain important tax information that will be needed for 2021 tax returns.
3. Expect tax processing delays.
The IRS experienced significant backlog in 2019 and 2020, which led to delayed processing. This is likely to continue for 2021 tax returns, so it’s important to plan accordingly. File, pay, and request refunds electronically for quicker processing.