KNOXVILLE, Tenn. (WATE) — Traditionally, the tax season begins in early February, but this year it’s been moved up two weeks. WATE 6 On Your Side Consumer reporter Don Dare spoke with a tax professional to find out why.
Filing taxes can be a headache all by itself, but the pandemic has clogged up the overall system. The IRS reports it closed last year’s tax season with an unprecedented 35 million unprocessed returns, and they’re still behind on nearly 8 million returns.
For tax preparer Mark Curran, there hasn’t been much rest. Just as he finished up last year’s returns for clients, some of them just a few months ago, he’ll be starting this year’s tax season two weeks early, January 24th, at the direction of the IRS.
“They basically want us to basically get the returns in as quickly as we can to give them as much time to process them,” said Curran, E.A., Knoxville Bookkeeping & Tax Service.
The IRS commissioner says the pandemic continues to create challenges — many of its employees are working from home and the IRS is millions of returns behind on manual reviews. In June, we have reported that Josie who lives in Knoxville was one of the millions of people still waiting for their stimulus check. That shortfall will be made up in this year’s filing.
“In 2021 taxpayers did receive – excuse me, eligible taxpayers – did receive the third economic stimulus payment which they will have to reconcile on their 2021 return. And if they didn’t get that amount, it will be added to their return,” said Curran.
In 2021, The American Rescue Plan increased the tax breaks for families with children. Millions of families received upfront monthly credits, but their write-off at tax time in 2021 may trigger a bill.
“The child tax credit changed this past year. Basically, taxpayers who qualified for that credit have been receiving a portion of that credit every month since the middle of 2021. Taxpayers are going to have reconcile that credit once they receive it with what they are due on their tax return for 2021.”
“What does reconcile mean?” asks Dare.
“So, the child tax credit was expanded this year. Taxpayers who received the advance child tax credit throughout 2021 will have to report those payments on their tax returns in order to see if they should receive even more or less of the credit,” explains Curran.
“The earned income tax credit is a credit for working families with children who are below a certain income threshold. The earned income tax credit hasn’t changed much. However, it is one of the credits that could potentially trigger a manual review. And, the IRS is short-staffed, so anytime something is wrong on the return, or you need a manual review, that could push your return months down the road.”
The IRS reports, the average income tax refund last year was $2,867. The IRS issued 95.6 million refunds in 2021. If you are due a return, you’ll get your refund within 21 days if you choose the fast route.
“E-filing your return and electing the direct deposit of your refund will give you the quickest way to get your money back from the IRS,” said Curran.
Remember last year and in 2020, the IRS extended the tax deadline into May. This year, the IRS says don’t expect that to happen. When you file your return electronically, you can follow its progress within 24 hours, by going to the IRS website.