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Treasury warns taxpayers to brace for a turbulent tax filing season

Tax returns for 2021 are due April 18 for most particular person filers, a few days after the traditional April 15 deadline due to a vacation in Washington, D.C., although extensions could be requested. This yr’s begin and finish dates, introduced by the IRS on Monday, are extra in keeping with historic norms, which have been upended since 2020 due to the pandemic.

Final yr, the IRS held off the beginning date to Feb. 12, to give the company further time to reprogram operations primarily based on tax regulation modifications handed in late 2020.

There haven’t been any discussions about delaying the deadline past this April, the Treasury official stated, although that’s occurred every of the final two years when the due date was reset to Might 17, 2021, and July 15, 2020.

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Disruptions from the continuing pandemic have been made worse by years of price range cuts, a shrinking workforce and outdated applied sciences on the IRS. President Joe Biden and Democrats in Congress need to increase spending on the IRS to enhance enforcement and different company features like customer support, however the Treasury official blamed Republicans for blocking contemporary funding.

To enhance odds of quicker tax return and refund processing, taxpayers ought to take a number of steps, together with filing electronically and offering direct deposit data somewhat than requesting paper checks for a return, the official stated.

E-filing is extra necessary than ever this yr, the official stated.

Although most taxpayers file electronically, some 10 % of complete tax returns nonetheless get despatched to the IRS on paper, and a good chunk of these paper returns stay unprocessed, caught up in a mail backlog that developed early within the pandemic. For tens of millions, that’s meant delayed refunds and incorrect penalties and assessments by the IRS as a result of company staff have but to course of the entire mail that poured in.

In accordance to the Treasury official, taxpayers also needs to flip to the IRS web site for self-help solutions to questions somewhat than dialing the IRS, given the low stage of service from perpetually flooded cellphone traces. They need to additionally test the accuracy of their tax returns earlier than filing, as errors set off critiques that may transfer slowly due to the prevailing backlog.

Further consideration is warranted this yr due to financial stimulus checks the IRS beforehand despatched out and advance Little one Tax Credit score funds, which greater than 30 million households obtained month-to-month from July via December. They will declare an additional six months’ value of the credit once they file their returns.

The IRS is sending taxpayers separate letters on stimulus and baby credit score funds they obtained to assist them precisely report the knowledge on their upcoming returns.

The IRS might get extra particular person earnings tax returns than regular this yr as a result of the stimulus and baby credit score funds might set off tax returns from individuals who usually earn too little to file. Nonetheless, that further workload shouldn’t have an effect on IRS processing, the Treasury official stated.

The company ought to have the ability to course of most refunds inside three weeks, its regular turnaround time, the Treasury official stated.

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