What Can I Do Now To Make Tax Filing Easier?

The IRS has put out a list of recommendations for tax filers to make the tax return process less painful in 2022.  With taxpayers receiving stimulus payments and advance Child Tax Credit payments, it is more important than ever to be prepared for tax season.

The IRS first recommends that taxpayers create and utilize an online account to help manage federal tax accounts.  An IRS online account can be created on the IRS website.  An online account is a useful tool that allows a taxpayer to do a variety of useful things, including:

• View Economic Income Payment amounts received
• Access information in the Child Tax Credit portal
• Access tax records via Get Transcript
• Make payments or set up payment agreements online
• Approve or reject authorization requests from your tax professional

The IRS also recommends that taxpayers organize and gather all necessary documents and information for tax return filing.  This will help ensure that filing errors are avoided, which could lead to long processing and refund delays.  Necessary and important documentation for taxpayers can include items like:

• Forms W-2 from your employers
• Letter 6419, 2021 Total Advance Child Tax Credit Payments
• Letter 6475, Your 2021 Economic Impact Payment 
• Forms 1099 from banks, issuing agencies, and other payers  
• Forms 1099-K or 1099-MISC or other income statement
• Other income documents and records of virtual currency transactions
• Form 1095-A, Health Insurance Marketplace Statement

Finally, the IRS recommends that taxpayers confirm that they’ve withheld enough tax for the 2021 tax year.  W-2 employees should consider adjusting their withholding if they owed taxes or had a large refund on last year’s return.  Taxpayers who receive large amounts of non-wage income should consider if estimated payments are needed or if calculated payments should be adjusted.

Planning for tax season now can help prevent a tax headache in the spring.  Please contact your DWD advisor if you have any tax planning questions.

Contributed By: Jessica Ogle, CPA | Partner | DWD CPAs & Advisors