What to know before filing your 2021 taxes
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(NewsNation Now) — The average American spends 11 hours preparing their tax returns. But how long does the IRS spend processing your return? This year, officials are warning of inevitable delays, due to a combination of pandemic complications, including staffing shortages, an influx of new social programs and huge backlogs.
Others say the problems are more structural. Since 2010 the IRS has had to process 19% more tax returns, with a 20% smaller budget and 17% less staff, according to the National Taxpayer Advocate. And while President Joe Biden has promised $80 billion of stable, multi-year funding for the department, those dollars come from the administration’s Build Back Better bill, which is currently dead in the water.
But the two largest factors affecting this year’s taxes are the child tax credit and stimulus checks. Here are four things to know going into the tax season.
You have extra days to file. Due to a surge of COVID-19 cases due to the omicron variant, this year’s tax filing season begins Jan. 24 – 17 days earlier than last year. Tax day was also moved from the usual April 15 to April 18, because of how the Emancipation Day holiday — which commemorates the end of slavery in Washington, D.C. — fell this year.
If you got a child tax credit, your tax return may be smaller. That’s because those checks essentially gave you the payments you would normally already get in a return, just early. The IRS will subtract what you received from what your total tax return should be and give you the rest.
Stimulus checks will be treated the same as in 2020. Because stimulus checks aren’t taxable income, you don’t have to pay these back and they won’t come out of your tax return.
File early! The IRS is facing large backlogs and staffing shortages, which means you might have to wait longer for your tax return. This comes after a year of record delays – there are still some 6 million Americans waiting on their 2020 tax returns! The IRS advises people to file early and be patient.
Still have questions? Read more about what’s new for 2021 taxes.