By: Diana Bello Aristizábal
On January 24, the IRS opened its tax filing season that will end on April 18 for most people. As this is a delicate procedure in which several variables come into play, up next a guide with everything you need to know to have a smooth journey.
First of all, if you are going to file your tax return for the first time and you are not familiar with the procedure, it is worth clarifying that in the United States all earned income must be reported to the Internal Revenue Service (IRS), and some people get a refund when the tax liability is less than the taxes paid.
Said earned income may come from a job executed for a company as an employee, in which case you must fill out the W-2 form, containing the total earned income of the year reported together with the tax withholdings according to the income range.
There are other forms aimed at independent contractors or those who earn income in a different way than through an employer, and some individuals can apply for credits that reduce tax debt. For specific questions, access the ‘Interactive Tax Assistant’ (ITA) on the IRS website.
That being said and regardless of your case, this year the general concern continues to revolve around whether the IRS will have a more efficient service, what changes will take place in the regulations and what can taxpayers do to speed up the process.
A shared effort between agency and taxpayer
Since the coronavirus pandemic began, the IRS operations have been seriously affected. “The agency today is still overwhelmed with work and behind schedule due to issues beyond their control,” explains Solange Reyes, Public Accountant and Certified Tax Preparer.
However, this year the delays could fluctuate depending on the complexity of every case. Typically, those who file their tax return electronically will receive a refund within three weeks.
“If this time is extended, it could be because the agency is reviewing the pending refund for the COVID-19 stimulus checks or because it has to follow a series of protocols to verify the identity of taxpayers who have suffered identity theft,” says Frank Rosillo, Certified Public Accountant and master in Tax Sciences.
With regard to changes in the laws, this year families must include on their tax return, the information on the Child Tax Credit and the Economic Impact payments indexed in letters 6419 and 6475, respectively, sent by the IRS to minimize errors and avoid further delays.
Eligible taxpayers who received advance Child Tax Credit payments in 2021 will receive the second half of the credit this year, while those who are eligible for the Recovery Rebate Credit (RRC) for stimulus payments will be able to claim the remaining amount of the stimulus.
But in addition to including said information in their tax return, taxpayers can follow other recommendations to speed up the process. The first is to avoid calling the IRS to find out the status of their case, as the agency warns it will not be able to answer all calls.
“If you have to, start calling at 6:59 a.m. However, it’s best to create an online account on the IRS website, through which you can quickly find out how far along your process is,” says Frank Rosillo.
Another recommendation is to submit your documentation through an e-file, because paper applications take much longer to process. On the other hand, Solange Reyes advises requesting the refunds to be sent by direct deposit to your bank account in order to guarantee that the money arrives within 21 days.
Also, be careful not to provide your social security number without proper protection to avoid becoming a target of identity theft and suffering from the delays that this entails. If you suspect or have already been the target of a fraud, an Identity Protection PIN can be requested from the IRS.
Additionally, be as transparent as possible and educate yourself before filing your taxes so you don’t have to pay penalties later or break the law. When in doubt, seek advice from ethical and responsible professionals, avoiding following guidelines from friends that may be incorrect.
In this regard, you should evaluate if it is necessary to hire a tax preparer or a public accountant or if it is possible to use mobile applications that facilitate this process.
“When the tax filing is simple, specialized software can be used. However, in more complex cases, it will be necessary to hire the services of a certified tax preparer who must always sign the documents and have a tax identification number,” says Solange Reyes.
Finally, the IRS advises you to read the tax return very well before sending it. “Mistakes cost money. So print your documentation and make sure it makes sense,” says Frank Rosillo.