We’re almost halfway through January, which means tax season is upon us. The IRS has never been the most efficient of agencies, but stimulus checks, advanced Child Tax Credit payments, and falling behind on tax returns during the pandemic have collectively thrown a giant wrench into their operations. Because of all these factors, it will be especially important to get a jump on your taxes this year in order to get a timely and accurate return. 

The biggest suggestions I can give for this year’s tax season is to 1) file early and 2) file electronically if possible. The pandemic began in March 2020 – right in the middle of tax season – and like many government agencies across the country, the IRS closed their offices. That meant that many paper tax filings for 2019 went untouched for months and months. The IRS office in Kansas City actually had truckloads of paper returns that just sat in their parking lot for months until staff could come back to the office to process them. In fact, we still have Missourian’s waiting for their 2019 tax refunds. 

The advanced Child Tax Credit (CTC) that was included in the American Rescue Plan will also be causing confusion for some families this tax season and making returns look different. The IRS began releasing monthly CTC payments to families who qualify this past July. 50 percent of the money a family qualifies for should have been paid in the monthly payments, and the other 50 percent should be claimed on your 2021 taxes. Hopefully no one reading this falls into this category, but it is possible that families who received an overpayment could be forced to backpay some of the money. For more information and to check the CTC online portal, please visit https://www.irs.gov/credits-deductions/child-tax-credit-update-portal.

For a refresher on who qualifies for the CTC and should be filing taxes accordingly, families making less than $150,000 and single parents making less than $112,500 should have seen payments in their bank accounts over the last six months. The credit amount for each child under age 6 is $3,600, and the amount varies from $2,000 to $3,000 for children ages 6-17. Payments should have been coming in installments of $300 per child under age 6 and $250 per child ages 6-17. For families who opt-ed out, your returns should look like they normally do, provided you haven’t had any major life changes in the last year. 

I know tax filing and waiting on returns has been an exceedingly frustrating process over the last few years. The IRS is a notoriously bureaucratic agency with seemingly unlimited red tape, and the extra items that have been put on their plate have made it even worse. If you are still waiting for tax returns for 2019 and 2020 – and far too many people are – the IRS is instructing you to file those on your 2021 taxes. Likewise, for anyone who is still waiting on an Economic Impact Payment, you will likely have to file a 2021 “Recovery Rebate Credit” to receive the full amount. 

If you’re looking for guidance or need to check the status of your payment, please visit https://www.irs.gov/newsroom/recovery-rebate-credit. More tips for filing this year can also be found at https://www.irs.gov/newsroom/irs-tax-tips. And as always, my office is here to be a liaison between you and the IRS when you run into issues. Don’t hesitate to give us a call.