Easy Filing Tips to Avoid Tax Refund Delays

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Tax planning is important for everyone, including those who don’t traditionally file their taxes. At the start of this tax season, the IRS has a large inventory of tax returns waiting to be processed due to several factors. These include delays from the pandemic. For example, the IRS is correcting significantly more errors on 2020 tax returns than in previous years. More than 10 million electronically filed returns contained errors requiring a manual review of the return information. Furthermore, those who filed electronically mostly had their returns processed automatically, with funds being returned within 21 days by direct deposit. We’re using last year’s experiences to be better prepared for this year and help individuals process services faster.

Some key tips to file a complete and accurate 2021 tax return include:

  • Get your documents ready.
  • Gather letters 6419 and 6475
  • E-file with direct deposit
  • File for valuable credits.
  • Use $0 adjusted gross income if your 2020 return is not processed
  • Work with a Tax Expert

1. Get your documents ready

Gather all your tax documents, such as W-2s and 1099s, receipts, and all the correct social security numbers required for dependents in order to file an accurate tax return. To deduct expenses, save all receipts and expense reports from the date of the event. If you make donations or gifts, save 1099-G forms for every person who received a gift from you, and make sure everyone has that form in hand when filing their taxes.

2. Gather letters 6419 and 6475

If you have received the third stimulus or the advanced Child Tax Credit, please make sure to input the correct amount of what was sent to you. Incorrect entries may delay your processing and refund. The IRS has sent both letter 6475 and letter 6419; letter 6475 reports the amount of advanced stimulus assistance you may have received, while letter 6419 reports the amount of advanced Child Tax Credit assistance. If you have these letters in front of you when filing, then it will be easier for you to report the correct amount and get any additional credits that may be available to you.

3. E-file with direct deposit

It is possible to file your taxes electronically with direct deposit to the IRS to receive a tax refund in as quickly as 21 days. The majority of taxpayers who do so will have their refund processed within this timeframe, although they may be subject to certain delays should there be any other issues with their return.

4. File for valuable credits

If you haven’t filed your 2020 tax return, it may be best to file as soon as possible. The IRS has noted that taxpayers are less likely to file returns when they use the Non-filer tool (IRS). This tool can help those who have not filed for the 2021 tax season. The IRS encourages you to still file your 2021 tax return so you don’t miss out on valuable tax credits like the Earned Income Tax Credit worth up to $6,728 for a family with three kids, the Child Tax Credit, and the Recovery Rebate Credit, which can make you eligible for a refund.

5. Use $0 adjusted gross income if your 2020 return is not processed

Whenever you e-file, make sure to input the adjusted gross income (AGI) for the year prior to that in which you are submitting your return. If you are filing your 2020 tax return now and have not already done so, use $0 as your AGI on this form. You will not be rejected for this circumstance.

6. Work with a Tax Expert

Hiring an accountant for your business can provide many benefits. Not only will they help you take advantage of tax breaks, but they’ll also help you file other IRS forms that are necessary for running a business. Businesses can be audited for tax deductions such as travel, vehicle expenses, and home office. To avoid this and stay in full compliance with the IRS, you should document these and report them accurately on your return. Meeting tax deadlines can be daunting for small businesses with little to no accounting knowledge. Having a tax professional on your side will help ensure that all the forms are filed correctly and on time, as well as provide you with maximum deductions and maximum peace of mind. Being self-employed also has its own set of challenges. There are self-employment taxes and quarterly estimated tax payments to deal with. All of this can be simplified by getting assistance from a professional.
As can be seen from the situations listed above, the tax season can get complicated. If you want to have a problem-free and undelayed tax period, you should work with a CPA. You can visit our website to see the services we provide to you as Manay CPA. Contact our expert team members to have a stress-free tax declaration period and benefit from our free consultancy service.

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