Friday, May 20, 2022

Tax Filers Should Expect Delays as the IRS Deals With Limited Staffing and Previous Year’s Backlog

-

Tax season begins on January 24, and taxpayers should expect delays as the IRS works to clear last year’s backlog and staffing shortages, according to Treasury officials.
Filing electronically with direct deposit and double-checking your return for inaccuracies, especially with stimulus and advance child tax credit payments, will help you prevent difficulties.

Tax season begins on January 24, and taxpayers should expect delays as the IRS works to clear a backlog and personnel shortages, according to Treasury officials.

According to the IRS, as of Dec. 23, it has not processed 6 million individual returns already submitted by taxpayers, and the situation is likely to worsen when the new tax season begins.

“We are unable to provide the level of service and enforcement that our citizens and tax system deserve and require in many areas,” said IRS Commissioner Chuck Rettig in a statement.

During the first half of 2021, there were fewer than 15,000 staff to handle the 240 million incoming calls or one person for every 16,000 calls.

According to the Taxpayer Advocate Service’s mid-year report, only 7% of taxpayers reached out to an agent during the previous filing season.

However, you may avoid delays by submitting electronically with direct deposit, according to Rettig, and keep an eye out for irregularities, which may necessitate a manual check, especially for stimulus and advance child tax credit payments.

Here’s what else you should know before you file your tax return.

Payments of the child tax credit in advance

For 2021, the American Rescue Plan increased the child tax credit to $3,000 for families with children aged 17 and under, with an additional $600 for children under the age of six.

Experts believe that while millions of Americans have received advance credits, filers who earned more than expected may be required to repay some of it.

Single filers must have a modified adjusted gross income of less than $75,000, and married couples filing jointly must earn less than $150,000 to be eligible for the full credit.

To reconcile payments, keep an eye out for Letter 6419 from the IRS, according to Larry Harris, director of tax services at Parsec Financial in Asheville, North Carolina.

You can also calculate advance credits through the Child Tax Credit Update Portal by comparing bank statements to IRS records.

Because many taxpayers had 2020 refund delays due to stimulus funds, Harris recommends starting the filing process as soon as possible.

“File your return as soon as feasible,” he said. “At the very least, that will begin the wheels in motion for what might be another slow year for IRS processing.”

Payment of a stimulus

As part of the $1.9 trillion American Rescue Plan, Americans began receiving the third round of stimulus payments of up to $1,400 in March 2021.

If you received a check, look for Letter 6475 in the mail, which covers what the IRS sent in 2021 as well as what’s still owed to other beneficiaries.

According to the IRS, if you owe a stimulus payment, you still have time to claim it by completing your 2021 tax return.

Subsidies for health insurance

In March, Congress increased premium subsidies for health insurance, making coverage more affordable for millions more Americans.

While the exchange has temporarily set premiums at 8.5 percent of household income, you may be required to refund certain benefits if your earnings reach the 2021 thresholds.

“For individuals who have to pay the money back, it may be a really unpleasant and stressful situation,” Harris added.

However, he urged that you start working with a tax professional now to anticipate 2021 income to estimate liabilities and set aside money for a future cost.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

FOLLOW US

0FansLike
3,320FollowersFollow
0SubscribersSubscribe
spot_img

Related Stories