It's almost time to file your federal tax return. The deadline to file your 2021 taxes is April 18th, 2022, but the Internal Revenue Service encourages people to file early to avoid processing delays. A host of issues may slow down your tax filing process and complicate the preparation of tax returns. Among them: The epidemic is still spreading, and the IRS has not yet counted all of last year's revenue.
"Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year." IRS Commissioner Chuck Rettig said.
Here are some key things to know in tax season.
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For the first time, Child Tax Credit is paid monthly by the IRS to eligible families. Depending on the amount of Children's Tax Credit you receive each month in 2021, you may receive a larger tax refund, as well as a smaller tax refund than expected.
Families that have received advance Child Tax Credit Payments are required to compare the advance Child Tax Credit Payments they received in 2021 with the amount of Child Tax Credit that they could correctly claim on the 2021 tax return.
Eligible families who did not receive monthly advance payment in 2021 can still get a lump-sum payment by applying for Child Tax Credit when submitting the 2021 federal income tax return next year. This includes families that usually do not need to declare.
2. Recovery Rebate Credit for the Third Stimulus Payments
From March to December 2021, the IRS issued the third Stimulus Payment. The money was used to help stimulate consumption during the pandemic. However, if you have not received payment or received part of the payment by December 2021, you can now apply for the amount on the tax return as a recovery tax refund.
It is time to file your tax return. When you submit your tax return, you will need to use the amount of your third economic impact payment and any additional payments received to calculate your correct 2021 recovery tax credit.
Like last year, you don't have to file a tax return, you still need to file a 2021 return to claim a recovery Rebate Credit to receive the tax credit from the 2021 Stimulus Payments.
3. Three Ways About Filing Taxes
You could either do it online, via email or through a tax software company.
Online: Tax preparation software is considered the easiest way to help file taxes electronically
Paper filing: Sending the tax file to the address of your convenience after completing the form
Tax software company: Hiring an accountant or a company to file your taxes
The IRS expects most individuals to submit their returns electronically. Electronic filing of tax returns and selection of direct deposits are the fastest and safest way to submit accurate income tax returns and obtain tax rebates.
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