To avoid having their return delayed for weeks or even months, there are a couple of things taxpayers can do to ensure a speedy return. File as soon as possible, file electronically, and ensure your documents are completely free of any inconsistencies.
While the IRS has stated that most 2021 tax returns should be processed within the normal 21-day timeframe, accounting experts and even the internal review department at the IRS have noted that this is overly idealistic, and the numbers just don’t add up.
The National Taxpayer Advocate, the IRS’ internal review organization, recently gave a report to Congress that acknowledged the last year has been less than ideal. Forbes recently reported that the IRS was even pushing some 2020 unemployment refunds to 2022
Even the IRS is sending mixed messages as it has acknowledged that it’s understaffed, overworked, and still dealing with an abnormally high backlog of 2020 taxes as the 2021 tax season approaches.
In many cases, this might not concern business owners as much as it will their employees. Even so, it’s a good idea and a kind gesture to give your employees a heads up about what’s going on in the world of taxes and how it could affect them.
If you (or they) have been a DIY taxpayer in years past, this might be the year to utilize a professional to get the job done quickly and perfectly.
With all that in mind, let’s get into the concrete actions to take for a quicker refund and the reasons why they matter.
The IRS is strongly suggesting that all taxpayers file electronically this year. While computers can process electronic returns, old-fashioned paper ones must be reviewed and handled by an actual human, of whom there is a noted shortage.
National Taxpayer Advocate Erin M. Collins said in no uncertain terms in her report to Congress, “Paper is the IRS’s kryptonite, and the agency is still buried in it.” She also acknowledged that since FY 2010, the IRS has seen their staff decrease by 17% while their workload has increased by 19%.
This year is all about dotting your I’s and crossing your T’s, and the best way to ensure that is by utilizing the services of a tax professional. Any discrepancies between numbers from one form to the next in your tax filing and your paperwork will be set to the side for manual review.
That might not be a big deal in a normal year, but 2022 is different. CBS News recently reported that there is still a logjam of returns from the prior year. While the IRS has substantially reduced the 30 million returns that had been backlogged earlier in 2021, they still have six million yet to process, five million higher than they would have in a normal, pre-COVID year.
This means that if you wrote $58,823 on one section and $58,832 on another, you’ve just found yourself in a line that’s still six million long. That doesn’t even take into account all the other 2021 filings that will also be set aside for inconsistencies.
This year, being thrifty could result in waiting a long time for your return, potentially years.
Providing the IRS with a direct deposit option to get you your refund is another extremely important step you can take to speed up getting a refund, should one be owed to you. For the same reasons as stated before, anything you can do to allow IRS computers to handle your return and not force it into human hands will cut any delays by quite a bit.
The IRS will be sending out several documents via the US Postal Service that will provide necessary information to complete your taxes. Letters 6149 and 6475 are documents you’ll receive if you claimed the Child Tax Credit or received the third stimulus check.
We’ve already discussed the importance of hanging on to letter 6149 in an earlier post on the Child Tax Credit. Letter 6475 is equally important if you’re amongst the millions that received the final stimulus check late in 2021.
It’s generally a good rule of thumb to hang on to anything the IRS is sending you. This is particularly true at a time when you might find yourself indefinitely incapable of reaching a human being to follow up on something you threw out.
It doesn’t cost you anything to store a piece of paper, but it can certainly cost you to throw it out prematurely.
While this information won’t be applicable to every person that reads this, every person that reads this knows someone for whom it’s applicable. Whether you needed this info, or it’s someone else in your life, tell your employees, friends, relatives, whoever! Let them know that there are things they can do to get that refund sooner than later.