In the Arkansas city of Little Rock, Soon, you’ll be scrambling to meet the April 18 tax-filing deadline.
The pandemic’s effects on the IRS backlog and the child tax credit could make preparing your 2021 tax return more difficult than it has been in the past.
Jaye Gasaway, a Little Rock-based CPA and advisor who founded Garland & Greenwood CPAs and Advisors, gave us some pointers on streamlining the filing process.
Claim your third stimulation check if you didn’t get it.
The recovery rebate credit must be claimed on the 2021 tax return if it was not received in the previous year, according to Gasaway.
The third and final stimulus payment was made by the IRS in 2021. If you received only a portion or none of the stimulus payment, you can claim it on your tax return this year.
Only the Recovery Rebate Tax Credit worksheet needs to be completed. However, while you won’t receive a cheque in the mail, you should see an increase or decrease in your refund.
Consider the impact of the child tax credit on your refund before you file your taxes.
Children’s tax credits were raised and made completely refundable under the American Rescue Plan in 2021. As a result of the legislation, parents could receive half of their credit line in monthly instalments rather than lump sums.
In 2021, they’ll be able to deduct the other half of their refund if they itemise
“It’s vital that you get that reconciled appropriately when you file your tax return,” Gasaway stated.
Some parents may be surprised by this year’s lesser refund or increased tax debt.
He indicated that if you received the entire advance payment and everything else remained the same from 2020, that should be expected.
#3 Make sure you file on time and online.
Because the IRS is swamped with unread mail, Gasaway recommends submitting your tax return electronically.
“The IRS automatically accepts your E-File,” he stated.
Your tax refund can be automatically deposited into your bank account if you provide them with your bank account details. Because there are fewer tax returns to compete with for your refund, the earlier you file the better.
In order to ensure a successful return, you must ensure that all of your paperwork is correct and comprehensive.
It will take longer to process your return if you provide false or missing information, Gasaway warned.