East Texas expert offers helpful tips as unique tax filing season begins
Advanced child tax credit payments, stimulus payments explained
TYLER, Texas (KLTV) - Monday marked the first day of tax season, and the IRS warns it could be a hectic one. The agency is facing a backlog of millions of returns filed last year. And they say changes related to the pandemic could cause even more chaos.
“I am a CPA, so my background is in public accounting and taxation,” said Jennifer Reynolds, accounting lecturer at UT Tyler’s Soules College of Business. She said this year’s tax season comes with major changes, like advanced child tax credit payments. The IRS is advising parents to not throw away a form being mailed out - called a Letter 6419.
“For the first time ever, Congress paid out advanced child tax credit payments. So taxpayers are going need that form to see how much they’ve received already - report that and then be able to claim any remaining amount of the credit they may be due,” Reynolds said. “In fact, some taxpayers may have to pay that amount back if they received an advance payment, and they were not qualified to receive it.”
Something else that must be reported: the third round of stimulus money that came last spring.
“So the stimulus payments are not taxed, but folks will want to be looking for that form. Some people may still be eligible to claim the recovery rebate credit if they did not get the stimulus payment last year, and they can claim that credit by filing their 2021 tax return. Even if they don’t have any taxes due or they weren’t prepared to file one. They’ll still want to file it so that they can get that credit.”
And all of these differences from years past come as the IRS starts this season with a major backlog - prompting experts like Reynolds to encourage filing early and electronically.
“E-file early and use a direct deposit if you’re due a refund,” she said. “But another recommendation would be to perhaps seek the advice of a CPA, if you’ve not done so in years past. Just because there are so many changes and complications that are unique to the 2021 tax year.”
Another change: the IRS is allowing people to deduct a charitable contribution even if they claim the standard deduction, according to Reynolds.
The filing deadline for Texans is Monday, April 18. Click here for the top five things to remember when filing income tax returns in 2022, according to the IRS.
Copyright 2022 KLTV. All rights reserved.