2022 Tax Filing Season is Here!
The IRS will be sending some taxpayers forms that are new for the 2021 tax year.
- 2021 advance child tax credit (Letter 6419)
In late December 2021 and continuing through January the IRS will be mailing Letter 6419 to individuals that received the advance child tax credit during 2021. This letter contains important information that can make preparing your taxes easier. Eligible families who did not receive an advance child tax credit payment can claim the full amount of the child tax credit on their 2021 tax return. Please include Letter 6419 with the tax documents you provide to Centennial.
- 2021 recovery rebate credit/stimulus payment (Letter 6475)
In late January the IRS will begin mailing Letter 6475 which will be for the third stimulus payment that was received by taxpayers. This payment was issued to taxpayers in March through December of 2021. If you did not receive the third stimulus check, and are eligible to receive one, Centennial can claim this credit on your 2021 tax return. Letter 6475 needs to be included with the tax documents you provide to Centennial.
A few reminders and changes for tax year 2021 to be aware of:
- Any unemployment income received for 2021 is The American Rescue Act Plan exclusion applied only to tax year 2020.
- For an Individual who does not itemize deductions, a deduction of up to $300 for qualified charitable cash contributions made during 2021. Taxpayers filing jointly can claim up to $600 for qualified charitable cash contributions made during 2021.
- 100% of business meals purchased from restaurants in 2021 and 2022 are deductible.
- Educators can include any expenses for personal protective equipment, disinfectant, and other supplies used for the prevention of the spread of coronavirus in their $250 of unreimbursed expenses deduction.
- Child and Dependent care credit – For 2021, the credit is refundable. The maximum credit is $4000 for one qualifying person and $8,000 for two or more qualifying persons.
We are encouraging our Centennial Tax clients to set up an online account with the IRS. Go to www.IRS.gov and click on the blue “sign in to Your account” box. This will take you to where you can choose to create an account with the IRS. You should have your smart phone available to take a picture of your license when prompted. If we need to assist a client with a notice, having an individual account with the IRS can expediate this process significantly.
Other features available through your IRS online account are:
- Digital copies of select notices or letters from the IRS
- Amount owed, updated for the current calendar day
- Balance details by year
- Payment history and any scheduled or pending payments
- Key information from your most recent tax returns
Through your online account you can make payments online, access your tax records via Get Transcript, and request a payment plan via Online Payment Agreement.
IRS Operations Update
The IRS is opening and processing mail, tax returns, and payments, refunds, and correspondence for the 2020 tax year. However, COVID-19 continues to cause delays in most of their services. These include, live phone support, processing tax returns filed on paper, answering mail from taxpayers, and reviewing tax returns, even for returns filed electronically.
As of December 18, 2021, the IRS had 6.3 million unprocessed individual returns. For some returns the IRS has indicated these returns will take an additional 3-4 months to process. As of December 18, 2021, the IRS had a backlog of 2.3 million unprocessed Amended returns. Their current timeframe is estimated at 5 months for completion of these returns. The IRS has suggested that taxpayers continue to check Where’s My Refund for their personalized refund status.
Centennial Tax & Accounting is here to help!
We look forward to working with you this tax season. If you have additional questions as you’re preparing to file, please set up a meeting with our professionals at Centennial Tax & Accounting or give us a call.