How Can I Make Sure I Get My Refund As Fast As Possible
Each tax filing is as unique as the individual it represents. To help expedite the tax refund process, consider one or more of the following tips:
- Visit us at any H& R Block office to ensure your return is ready to file when e-file opens.
- Consider e-filing versus traditional paper filing.
- Complete a tax return that is free of any errors or miscalculations. This means carefully reviewing personal information such as your name, social security number, home address and bank information, if applicable.
How Do I Get My Refund
One of the ways the IRS tries to convince you to file online is to assure you that you will get your refund faster in less than 21 days, in most cases, although there are exceptions. Once youve filed, you can check the status of your refund online. You can also mobile app, which allows you to check the status of your refund, pay your taxes, and get other information.
Limit Penalties And Interest And Even Claim The Child Tax Credit
If you missed the April 18 deadline to file your taxes and didn’t request an extension , the Internal Revenue Service offers simple advicefile now. The sooner you file, the less you will pay in penalties and interest.
There is no penalty for filing late if you are due a refund. In fact, you have 3 years to file to get your money back.
If you didn’t file because you didn’t owe taxes, you could be leaving money on the table in the form of refundable tax credits such as the Earned Income Credit, Child and Dependent Care Credit, or Child Tax Credit. Those who don’t usually file and didn’t qualify for a third-round Economic Impact Payment, or got less than the full amount, may be eligible to claim the 2021 Recovery Rebate Credit when they file their 2021 tax return.
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If I Bought Crypto How Should I Answer The Question About Virtual Currency On The Front Page Of My Tax Return
On the very first page of 2022 tax returns, the IRS has signaled the importance of crypto by asking: At any time during 2021, did you receive, sell, exchange or otherwise dispose of any virtual currency?
If you simply bought crypto with fiat currency and took no later action upon it , then you can safely choose no. If you did anything elseincluding buying NFT or a product online, staking your crypto, or converting it back into cashthen you should choose yes.
What If I Only Receive Social Security Benefits
In most cases, if you only receive Social Security benefits you wouldn’t have any taxable income and wouldn’t need to file a tax return.
One catch with Social Security benefits is if you are married but file a separate tax return from your spouse who you lived with during the year. Then you will always have to include at least some of your Social Security benefits in your taxable income to see if it is greater than your standard deduction.
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How Do I Pay Online
The IRS lists a variety of ways you can pay your taxes online.
If you use tax preparation software or have your taxes prepared by a tax professional, you can have the IRS pull the funds directly from your bank account via the Electronic Federal Tax Payment System at the same time you file. Be aware that, according to the IRS, it can take up to five business days to process a new enrollment.
You can also use IRS Direct Pay to pull funds from a savings or checking account. Finally, you can use a credit or debit card however, there is a fee involved . In fact, if you use a credit card, you may have to add as much as 1.98 percent of your payment amount.
When Can I Expect My Refund
If you file electronically and choose direct deposit, the IRS says you can expect your refund within 21 days, assuming there are no problems with your return.
The IRS has already processed more than 70 million returns for fiscal 2021 and issued nearly 52 million refunds. But the agency has also warned about delays in processing returns, especially as the 2022 tax season involved complications like stimulus payments and an expanded child tax credit.
“The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don’t face processing delays,” IRS Commissioner Chuck Rettig said in a statement.
Experts agree direct deposit is the fastest way to get your refund from the IRS.
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When Social Security Benefits May Be Taxable
When determining whether you need to file a return and you receive Social Security benefits, you need to consider tax-exempt income because it can cause your benefits to be taxable even if you don’t have any other taxable income.
Here’s an example of where you may need to file, even with tax-exempt income:
- You are under age 65 and receive $30,000 in Social Security benefits, but also receive another $31,000 in tax-exempt interest. $14,700 of your Social Security benefits will be considered taxable income.
- This is greater than your standard deduction and you would need to file a tax return.
To figure out if your Social Security benefits are taxable:
- Add one-half of the Social Security income to all other income, including tax-exempt interest.
- Then compare that amount to the base amount for your filing status.
- If the total is more than the base amount, some of your benefits may be taxable.
TurboTax can help you estimate if you’ll need to file a tax return and what income will be taxable.
What’s The Deadline For Filing An Extension
You still have to submit your request for an extension by April 18 . But you will have until Oct. 17, 2022, to file a completed 2021 tax return.
Keep in mind that filing an extension doesn’t push back when you need to pay the IRS: To avoid late penalties, you still need to submit an estimate of what you owe. An extension just gives you more time to complete your return.
Your state may have a different tax deadline than the IRS does.
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Will The Tax Deadline Be Extended Again
That remains to be seen. The IRS had no plans to extend the tax-filing deadline for the 2020 tax year, but it later changed course and pushed the standard April 15 deadline to May 17, 2021. The agency also delayed Tax Day the year prior in response to the COVID-19 pandemic.
While the state of the pandemic remains in flux, the IRS has so far given no indication that it will postpone the tax-filing deadline for the third year in a row. In addition, given the rules changes going into effect in 2022 as well as potentially complicating factors, like this years expanded child tax credit payments and repayment of deferred Social Security taxes, taxpayers have even more incentive to get a head start on their 2021 returns.
Tax Rules Changed By Covid Relief
Pandemic-related relief changed many rules for 2021 tax returns. On 2021 returns, there’s no longer an age cap or ceiling set at 64 or younger for workers to qualify for the earned income tax credit. It’s a one-time-only deal, but the AARP is pushing to extend the tax break for older workers beyond 2021 tax returns.
The earned income credit has been expanded so that the credit can apply on 2021 federal returns to workers who are 65 or older, even if they do not have dependent children, thanks to the American Rescue Plan passed last year.
It now also applies to childless workers from age 19 to 24 who are not half-time or full-time students and are claimed as dependents on their parents’ tax return.
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How Do I File Online
There are several ways to file online, depending on your income and your comfort level in dealing with the whole income tax process.
If your adjusted gross income was $73,000 or under, you can use the IRS Free File option. The site offers a number of third-party services that can help you put together and file your taxes free of charge. Of course, that is assuming the third party doesnt try to scam you into paying more than you have to back in April of 2019, ProPublica revealed that TurboTax and other suppliers were deliberately hiding the pages for their free services in order to convince taxpayers to purchase additional features. As a result, in early 2020, the IRS published rules prohibiting these practices. Still, it pays to be careful.
Free File is available for those whose income is $73,000 or less.
If your income is above $73,000, you can still use fillable forms provided by IRS Free File, but you dont get the support of the free software, and you cant do your state taxes through this method. The forms will be available starting on January 24th.
If you use a tax preparer, the person or company who does your taxes needs to be authorized to use e-file if you dont already have a tax professional, you can find one at the IRS site.
When Are Estimated Taxes Due
Those who pay estimated taxes have a slightly different filing schedule than everyone else. People who pay quarterly estimated taxes include the self-employed, as well as those who work similar entrepreneurial or independent contractor jobs. If your paycheck doesnt have income taxes taken out before the money gets to you, then this requirement applies to you.
Estimated taxes are due quarterly and must be submitted with Form 1040-ES. Heres when those payments are due:
- First-quarter payments: April 15
- Third-quarter payments: Sept. 15
- Fourth-quarter payments: Jan. 18, 2022
Note: Like Tax Day, quarterly tax payments are due on the 15th of the month. But because Jan. 15, 2022, is a Saturday, and Monday, Jan. 17 is Martin Luther King Jr. Day , the deadline to pay estimated taxes on the self-employment income you earn in the fourth quarter of 2021 has been pushed to Jan. 18, 2022.
This is the standard schedule to follow, provided nothing interferes.
If youre an employee who earns tips, youre required to report all your monthly tip earnings to your employer by the 10th of the following month. Your employer is responsible for sending those numbers to the IRS, as well as for adjusting how much money comes out of your paycheck to satisfy your tip withholding.
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What Could Cause A Refund Delay
There are countless reasons your tax refund could be delayed. Weve outlined some common instances where a delay could occur:
- If you file a paper return, the IRS says you should allow about six weeks to receive your refund.
- If the IRS mails you a physical check, you will receive a check through the mail.
- If you file Form 8379, Injured Spouse Allocation, it could take up to 14 weeks to process your tax return.
- If your identity has been stolen and another return was filed with your social security number, it could take longer for the IRS to sort out the situation.
- If you owe a debt, like unpaid child support, your refund could be offset to pay part or all of it.
Each of the possibilities above could cause a delay or prevent receiving the refund altogether. Its important to note that each individuals tax scenario is unique and no two filings are handled exactly the same.
Do I Have To Pay Taxes On Unemployment Income
Normally unemployment compensation is taxable at both the federal and state levels. However, the American Rescue Plan signed into law on March 11 allows people with incomes of up to $150,000 to waive federal taxes on the first $10,200 of unemployment benefits collected in 2020.
Some tax software providers, including H& R Block and TurboTax, have updated their platforms to account for the new tax exclusion, so you can file taxes as you normally would and it will calculate what you owe.
If you filed your tax return before the tax exclusion became law, don’t file an amended return the IRS is going to issue an automatic refund for any taxes paid on the exclusion amount. Those refunds are supposed to start going out in May.
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Do I Even Need To File
You should first consider how much money you earned in 2021.
According to H& R Block, people under 65 who made less than $12,550 do not have to file individual taxes. The minimum income climbs to $14,250 for people 65 and older.
For joint returns for married people, H& R Block says the minimum income to file is:
- 25,100 if both spouses under age 65
- $26,450 if one spouse under age 65 and one age 65 or older
- $27,800 if both spouses age 65 or older
The caveat with not filing a return is missing out on receiving a refund if you are owed one.
Turbotax For Tax Year 2021 Is Now Available
The New Year has just arrived and the 2021 tax season is right around the corner. Its a good time to start going over what your filing options are and what youll need as you prepare to file your tax return. No matter how complex your tax situation is, were here to make things easier.
With TurboTax you can file on your own, get help and advice from tax experts, or even have a dedicated expert do your taxes for you, from start to finish. We know that every Canadian has a unique tax situation and theres no one-size-fits-all. To make sure youre getting the best there is to offer,were always improving our products to give you all the tools and levels of help you need to make the most out of your taxes, no matter what your tax situation is.
For the 2021 tax year, we are launching an improved lineup of tax filing options catered to your unique needs, guiding you step by step so you feel confident your taxes are done right, and you get every dollar you deserve.
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Awaiting Processing Of Previous Tax Returns People Can Still File 2021 Returns
Rettig noted that IRS employees continue to work hard on critical areas affected by the pandemic, including processing of tax returns from last year and record levels of phone calls coming in.
“In many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, for IRS employees and for me,” Rettig said. “IRS employees want to do more, and we will continue in 2022 to do everything possible with the resources available to us. And we will continue to look for ways to improve. We want to deliver as much as possible while also protecting the health and safety of our employees and taxpayers. Additional resources are essential to helping our employees do more in 2022 and beyond.”
The IRS continues to reduce the inventory of prior-year individual tax returns that have not been fully processed. As of December 3, 2021, the IRS has processed nearly 169 million tax returns. All paper and electronic individual 2020 refund returns received prior to April 2021 have been processed if the return had no errors or did not require further review.
Taxpayers generally will not need to wait for their 2020 return to be fully processed to file their 2021 tax returns and can file when they are ready.
What To Do If You Owe Taxes On Unemployment Benefits
After going through these steps, you may find that you owe taxes to the IRS. If you do, don’t panic. You have options.
However, not paying that tax bill is not one of those options. You should make every effort to pay as much of your tax bill as possible. Not paying your tax bill means that you’ll immediately face additional penalties for late payment, as well as interest that accrues on your unpaid taxes. If you continue to not file your taxes, the IRS may seek legal remedy against you.
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Tax Filing Deadline For Maine And Massachusetts Residents
Residents of Maine and Massachusetts get an extra day until April 19 to file their federal income tax return. Why? Because Patriots’ Day, an official holiday in Maine and Massachusetts that commemorates Revolutionary War battles, falls on April 18 this year. So, for the same reason Tax Day is moved from April 15 to April 18 for most people , the IRS can’t set the tax filing and payment due date on April 18 for taxpayers in those two states. As a result, the deadline is shifted to the next business day for Maine and Massachusetts residents, which is April 19.
Qualifying Rules If You Can Be Claimed As A Dependent
You must file a tax return for 2020 under any of the following circumstances if you’re single, someone else can claim you as a dependent, and you’re not age 65 or older or blind:
- Your unearned income was more than $1,100.
- Your earned income was more than $12,400.
- Your gross income was more than $1,100, or $350 plus your earned income up to $12,050, whichever is greater.
Married dependents who are not age 65 or older or blind are subject to these filing requirements plus one more: They must file if their gross income was at least $5, and their spouse files a separate return and itemizes deductions.
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