This week, a press release was issued confirming that IRS will begin accepting and processing 2022 tax year returns on Monday, January 23, 2023, marking the “official” opening to this year’s tax season.The announcement also provides an optimistic outlook for a much smoother tax season this year in light of increased staffing and ongoing improvements made possible by the passage of the Inflation Reduction Act (the Act) in August of 2022. That said, they also acknowledge that the volume and complexity of returns can make timing unpredictable.
What we do know is that in the months since the Act was signed, significant investments have been made into systems improvement and readiness, including tackling the backlog of languishing returns from the past three years due to the pandemic. More importantly, the multi-year funding has allowed for extensive hiring and training of telephone assistors and in-person staff to provide taxpayer support for the more than 168 million returns that are expected to be filed between now and mid-April.
And speaking of April…thanks to the celebration of Emancipation Day in DC, we all have an “extra” three days to file our individual Federal returns this year. The filing season deadline for individual returns or extension requests is Tuesday, April 18, 2023. Most states, including Massachusetts, have followed suit for state returns. And even if you haven’t thought about it just yet, now is the time to start gathering your documents to avoid processing delays!
Remember the American Rescue Plan Act of 2021? That was the third economic stimulus package that was passed in the middle of tax season last year. Now, a year later, taxpayers who got third-round Economic Impact Payments (EIP) were supposed to have received IRS Letter 6475 detailing the amount in order to report it on their 2021 tax returns.
Well guess what? That hasn’t happened, and letters now aren’t expected to arrive before March, so we’re here to help you get us the information we need to avoid delaying your returns.
Keep reading to find out what to do.
Third Round Stimulus: How Much Did You Get?
It’s been almost a year since these payments were issued, so it’s not surprising that most people aren’t sure of the exact amount they received, but that’s what we need to know to process your return. It’s worth noting that we have had some clients tell us they didn’t receive any third round EIP, only to find out that they were mistaken when taking a second look. So it’s definitely worth doing a little legwork now to avoid a lot of potential headache later.
In the absence of Letter 6475, there are a number ways you can find the amount of your third Economic Impact Payments. Here are your options:
Locate Your Notice 1444-C, Your Third Economic Impact Payment. These letters were sent from the IRS in April 2021, after the last stimulus payments were made. If you are organized enough to have tucked this letter into your 2021 tax folder last spring, it will show you the total amount of the third payment, as well as “plus-up” payments for those who were eligible. It looks like this:
Request Your 2021 Account Transcript, which can be done several ways:
online or by mail using Get Transcript on the IRS website.
by calling the automated phone transcript service at 800-908-9946
by submitting Form 4506-T
Check Your Bank Statements from March or April 2021 (or later). If you had direct deposit, the EIP should appear credited to your account in late March or April. If you received a paper check and procrastinated before make the deposit, you should look at the following months.
Access or Create a Personal Online IRS Account. If you have already created an online account at IRS.gov, once you sign in, you’ll find the information on the Tax Records tab/page under the section “Economic Impact Payment Information”. If you don’t have an online account, it’s not a bad idea to create one, just know it will take some time, and require you to also have or create an “ID.me” account for verification. Learn more…
So, if you are 100% certain that you either received the full amount of EIP ($1400 each for you and your dependents) OR, were above the threshold and didn’t get anything, a verbal confirmation either way should suffice. Otherwise, some proof of the exact amount is the only way to be sure your return won’t go to the back of the line, resulting in a probable delay of six months or more for the correction to be processed.
When is Tax Day 2022?
The deadline for filing your Federal Taxes this year is Monday, April 18, 2022. This is because even though April 15th is a Friday, it is also Emancipation Day, which is celebrated in Washington, DC, causing all businesses and government offices to close.
Residents of Massachusetts and Maine have until Tuesday, April 19, 2022, in observance of the state’s Patriots Day holiday.
The deadline for filing your Federal Taxes this year is Monday, April 18, 2022. This is because even though April 15th is a Friday, it is also Emancipation Day, which is celebrated in Washington, DC, causing all businesses and government offices to close.
Residents of Massachusetts and Maine have until Tuesday, April 19, 2022, in observance of the state’s Patriots Day holiday.
We continue to encourage everyone to use the client portal for the safest transfer of documents, but are happy to be able to provide alternatives to accommodate what works best for you!
Sending Us Hard Copies of Your Documents?
Priority Mail is best! The U.S. Post Office offers free tracking with Priority Mail, and has the best rates for anything under two pounds. We do NOT recommend sending via FedEx. Our FedEx delivery person often leaves packages in the main building lobby rather than bringing them to our office.
Reminder:We do not need your medical receipts, only the total you spent if you think you have enough to deduct.
Dropping Off?
We have a secure lockbox set up just inside our office door, along with hand sanitizer, pens, and large white envelopes if needed. Please do not put anything through the mail slot, as we cannot guarantee the safety of your information unless it is in our locked dropbox.
Make sure your documents are sealed in an envelope with your name on the outside before placing in the locked dropbox. The box is emptied and the area sanitized every half hour!
Your Returns are Ready for You to Sign. Now What?
Once we have completed your returns, we will give you a call, and you can choose to have us send them to you via Priority Mail, or you can come to our office to retrieve them.
If you choose to come to our office to pickup your tax return:
Please call us from the parking lot when you arrive.
We will place your documents on one of two desks (A or B) just inside our office.
Once you know which table your documents are on, you may enter the office to retrieve them.
You may opt to take your return back to your car to look over and sign before leaving. However, we recommend that you take your return home to review before sending the signed copy back to us for filing.
What to look for if you are picking up documents from our office.
Paperless Bill Payment
Did you know you can pay your Business Bookkeeping Services invoice online? We have a secure payment gateway which can be accessed from the homepage of our website for your convenience. You can pay your invoice by credit card through this link instead of writing a check! Easy.
The passage of the most recent stimulus package —The American Rescue Plan— is good news for most taxpayers. However, particularly for those who received unemployment benefits in the last year, implentation of the bill after the start of tax season is creating some confusion.
Shortly after the president signed the Act, IRS issued a statement indicating that a software update will be installed to address any potential issues with 2020 tax returns. In the meantime, the main takeaways with regard to unemployment are:
The American Rescue Plan includes a retroactive benefit that will make the first $10,200 of unemployment income from 2020 non-taxable for individuals who earned less than $150,000.
IRS is urging taxpayers who are eligible for this benefit to delay filing pending the software industry update that will account for the adjustment.
Taxpayers who have already filed their 2020 returns should also wait to see if an amended return will be necessary.
For our clients who meet the eligibility requirements of the unemployment provision:
If we have already processed your taxes and it is determined that an amended return is necessary, the update will be filed after April 15th, per IRS guidance.
If we have your information and/or your documents are in progress, we will be holding your return pending the Federal and State software updates before filing.
If you have any questions about the unemployment provision in the most recent stimulus, IRS has posted more detailed information here.
