*Must Read* before preparing your taxes for 2022. updated 1/25/22
EIP3: Third Economic Impact Payment, patience with the IRS and Forget everything you learned in 2020.
There were so many changes to 2021 tax return, that I could not put it in one blog post. I will try to break it apart and focus on items that apply for most taxpayers.
You will need this information to prepare your taxes.
Last year was another challenging year for everyone due to Covid-19 pandemic.
As if life wasn’t tough enough, the IRS changed the individual tax form 1040, and added 20+ pages to it this year.
If you are reading this and experiencing hardship from communicating with the IRS, please bear in mind that the Internal Revenue Service is made of humans too. All accountants breath air, live and die too. As of December 31, 2021, the IRS has 6 million unprocessed returns. Not kidding! https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue
Don’t let those IRS collection letters sit. If you do receive one from the IRS, please seek assistance from your tax accountant immediately. Right now, many of those response letters are sitting in collection warehouses. But it’s still the taxpayer’s responsibility to respond in timely manner. Even if the IRS does not answer the phone lines, that doesn’t exempt the taxpayer from the collections countdown clock. Whatever happens, please review the Taxpayer Bill of Rights.
Instead, write a letter to your local senator or US Representative to fix the IRS. “Dear <insert senator/US Rep>, Honest taxpayers are getting tax collections letters from the IRS. My tax return/ tax payments/ tax refund aren’t being processed in a timely manner” or “Please fix the IRS, no one is answering the phone, I’ve been placed on hold for x days.” The more pressure we put on Congress, maybe it will make things better for the future.
For those who have children and have received Advanced Child Tax Credit Payments: I will need the amount you received for Third Economic Impact Payment. It will be Letter 6419.
IRS is going online now I have great news for all taxpayers: IRS started a new online account for taxpayers. This is awesome, because now you securely view your tax records, AGI, estimated tax payments and economic income payments (EIP). Everyone need to sign up for this account, I believe they even have a smartphone app for it too, called IRS2Go.
The nice thing about registering with the IRS online account, is that you will have the same records as the IRS. ( Don’t call because the IRS phone system is overwhelmed.)
That’s it for today. Stay tuned for more tax updates!
