The IRS will officially begin tax season on Monday, January 24th. There have been some changes to tax-filing season this year, and you can get ahead by learning what will be expected of you.
In 2021, the IRS was inundated with calls about filing extensions, unemployment, and stimulus checks, so this year they have provided free help options to taxpayers. This includes Volunteer Income Tax Assistance and Tax Counseling for the Elderly, as part of the IRS Free File program.
What is the Free File Program?
Free File opened on January 14, 2022, for all participating providers. It will hold completed returns until they can be filed electronically with the IRS, once systems open next Monday, January 24, 2022. Electronic filing is the most efficient and rapid way to receive your refund. Once you file electronically, you can decide how you want to receive your refund. It can be by direct deposit, a prepaid Visa Debit Card, or mail. Traditionally, it takes 21 days after your tax return is processed for you to receive payment via direct deposit. When you file electronically, you receive a digital copy of your return and can check the status of your refund online.
*Taxpayers who made $73,000 or less in 2021 are eligible to file their taxes for free electronically. Those who make more than $73,000 can use the free fillable forms.
The IRS has a list of free online options for filing your tax return electronically. Browse through the options here.
Do I have to file taxes for my transactions through Venmo, Zelle, Cashapp, or other payment apps?
Beginning in 2022, small business owners or those with supplemental income who receive payments for goods and services through mobile payment services will either receive a 1099-K form for all transactions over $600 or the platform will report it for you. This form allows the IRS to receive information about the business transactions you have made on these platforms.
In some cases, individuals may already be receiving 1099-K forms from mobile payment services because. If you receive a 1099-K form from any of these mobile payment services, you should report this income.
I sometimes receive money on those platforms. Do I have to worry about being audited?
Unless your transaction is a significant figure (up to five, six figures) and is flagged by the IRS, there is no need for concern. On the chance that you are flagged, you may provide documentation to receive approval from the IRS.
My 2020 tax return is still being processed. Can I still file my 2021 return now?
Yes, you do not need to wait on your 2020 return and can file for 2021 whenever you’re ready. The deadline to file for this year is April 18, 2022.
What do I need to do to receive the remainder of my child tax credit payment?
The IRS has begun to send out letters (Letter 6419) to families or individuals who received CTC in 2021. This credit can be a tax refund or monthly payments given to families with children under 17. The credit has been increased to $3,000 per child 6-18 and $3,600 per child under 6, depending on the family’s income.
Letter 6419 will detail how much of the credit you’ve received, and how much remains to be received upon filing your taxes. You can also find this amount using the child tax credit update portal on the IRS website. You will fill out Schedule 8812 and Form 1040 to receive the remainder with your 2021 tax returns. Married couples will receive two letters and will need both to file an accurate return.
If you are eligible but have not received any portion of the CTC, you can claim the full credit by filing your 2021 tax return. Refunds for CTC will be issued starting mid-February.
Who is eligible for the CTC?
- Married couples filing jointly who make less than $150,000
- Single-filers who make less than $75,000
Are there any tax breaks this year?
Yes. Low to moderate income workers and families that qualify can use their Earned Income Tax Credit (EITC) to reduce the taxes they owe, and in some cases, increase their refund.
To qualify, you must
- Be a US citizen or resident alien for the full tax year
- Have a valid Social Security number by April 18, 2022
- Have worked and earned an income under $57, 414
- Have investment income below $10,000 in 2021
- Not file Form 255 (foreign earned income)
There are also special qualifying rules for clergy members, military members, and taxpayers/their relatives with disabilities.
Not sure if you qualify? Use the IRS’ qualification assistant to find out if you can receive a tax break this year.
Lone Star Legal Aid is a 501(c)(3) nonprofit law firm focused on advocacy for low-income and underserved populations. Lone Star Legal Aid serves millions of people at 125% of federal poverty guidelines that reside in 72 counties in the eastern and Gulf Coast regions of Texas, and 4 counties of Southwest Arkansas. Lone Star Legal Aid focuses its resources on maintaining, enhancing, and protecting income and economic stability; preserving housing; improving outcomes for children; establishing and sustaining family safety and stability, health and well‐being; and assisting populations with special vulnerabilities, like those with disabilities, or who are elderly, homeless, or have limited English language skills. To learn more about Lone Star Legal Aid, visit our website at https://www.lonestarlegal.org.
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