The tax season has begun: how to prepare a declaration without errors and quickly get a tax refund
Today, January 24, the tax season started - the IRS began accepting and processing tax returns for 2021. Three-quarters of Americans receive a tax refund every year after they file a return, often the largest single payment a family receives in a year. Usually the return comes within 21 days after the declaration is submitted, but it may be delayed. Most often, the delay is not the fault of the IRS (although last year the agency did not have time to process returns on time due to lack of staff), in most cases the return is delayed due to mathematical or other errors in the return that the taxpayer made. Declarations with an incomplete list of documents and with incorrect calculations require additional verification and clarification of the data, and then the return is delayed for weeks or even months.
We asked an experienced accountant Michael Koloden give some advice on how to prepare tax documents correctly and avoid mistakes that can delay tax returns. He outlined three steps that every taxpayer must take before preparing and submitting their tax return.
1. Collect and Organize All Tax Forms and Income Documents
A systematic and complete set of basic tax forms simplifies tax preparation and prevents errors that lead to delays in processing and sending refunds.
Important tax forms required for filing a return:
- Forms W-2 from employers;
- Forms 1099 from banks, issuers and other organizations through which you received any payments, including unemployment benefits, dividends, pensions, annuities, etc.;
- Forms 1099-K, 1099-MISC, W-2 or other income statements for workers in the gig economy;
- Form 1099-INT for Interest Investors;
- Other income documents and records of digital currency transactions.
Before starting the preparation of the tax return, the taxpayer must also have the following documents:
- Letter 6419 (should be sent by the IRS). This document shows the total amount of the advance tax credit for children that a person received in 2021.
- Letter 6475 (also from the IRS). It indicates how much government financial assistance in connection with the coronavirus (Economic Impact Payment) you received in 2021. If you were eligible for more at the end of the year, you can claim that amount in the form of a tax credit.
- Form 1095-A is an extract from the Health Insurance Marketplace and is required to reconcile your advance health insurance tax credits.
In addition, Michael Koloden recalled that taxpayers must keep copies of tax returns and all supporting documents for at least three years.
If you do not have any document, then you can request a free transcript from the IRS. The data in the transcripts covers your previous years' returns, income details, and more. To receive a transcript, log into your account on the IRS website and click on “Get Transcript Online” on this page. After answering a few questions, you will be able to download the transcript you need in PDF format.
If you do not have an account on the Internal Revenue Service website, you can request transcripts by phone or mail.
It is very important to check the documents and not try to bet some amount at random, an inaccuracy of even a couple of hundred dollars will immediately send your declaration for additional verification and significantly delay its processing and refund.
The specialists of the company will help to prepare your declaration correctlyMICHAEL KOLODEN CPA PC: 7308 18th Avenue, Brooklyn NY 11204; tel. (718) 360-5337; e-mail: firstname.lastname@example.org.
2. Check that your mailing address and email address are up-to-date, and report a name change
In order to receive the necessary tax forms from the employer, bank and other organizations on time, the taxpayer must ensure that they have his current mailing address or email address. You can clarify this information with banks and employers in any form convenient for you; there are special procedures for government organizations.
You can notify the Internal Revenue Service of a change of address via Form 8822 Change of Address, it must be completed and sent to the IRS. You can also fill out an application on USPS.com or your local post office to have your mail forwarded to the new address.
If during the year you changed not only the address, but also the name, then this must be notified to the Social Security Administration.
More information about tax rules and the nuances of filing returns can be found in the companyMICHAEL KOLODEN CPA PC: 7308 18th Avenue, Brooklyn NY 11204; tel. (718) 360-5337; e-mail: email@example.com.
3. Check the correct amount of taxes withheld from you and, if necessary, make changes
If you find that you owe a lot in taxes for 2021 or received too much return last year, reconsider your tax withholding amounts from your paycheck. Changing this amount will reduce your final tax debt in the future.
In addition, it is worth reviewing this amount if significant changes have occurred in your life: marriage or divorce, the appearance of a child, a second job, or a change in financial situation.
You can change the amount of taxes withheld from you by filling out a new Form W-4, Employee Withholding Certificate (Employee's Withholding Certificate).
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