A page on the IRS website reminds taxpayers to take the steps now to make the tax filling process easier in 2022.
Steps to Take Now to Get a Jump on Your Taxes provides advice for filing individual tax returns.
One of the most important steps taxpayers can take to prepare for the upcoming tax season is to gather and organize their records. Your tax preparer will need many of the following items, if applicable, for your tax return:
- Forms W-2 from your employer(s)
- Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan
- Form 1099-K, 1099-MISC, W-2 or other income statement if you worked in the gig economy
- Form 1099-INT if you were paid interest
- Other income documents and records of virtual currency transactions
- Form 1095-A, Health Insurance Marketplace Statement, to reconcile advance Premium Tax Credits for Marketplace coverage
- Letter 6419, 2021 Total Advance Child Tax Credit Payments to reconcile your advance Child Tax Credit payments
- Letter 6475, Your 2021 Economic Impact Payment, to determine whether you are eligible to claim the Recovery Rebate Credit
You should notify the IRS if their address changes and should notify the Social Security Administration of a legal name change.
Those who have an Individual Tax Identification Number or ITIN need to pay attention to its expiration date.
According to the IRS, an ITIN only needs to be renewed if it has expired and is needed on a U.S. federal tax return.
If an ITIN was not included on a U.S. federal tax return at least once for tax years 2018, 2019, and 2020, then it expired on Dec. 31.
ITINs with the middle digits 70 through 88 have expired. In addition, ITINs with middle digits 90 through 99, if assigned before 2013, have expired. Taxpayers who previously submitted a renewal application that was approved, do not need to renew again.
One of the new items for this year’s return is the reconciliation of advance Child Tax Credit payments.
When you file your 2021 tax return, you will need to compare the advance Child Tax Credit payments that you received during 2021 with the amount of the Child Tax Credit that you can properly claim on your 2021 tax return, if you already received advance payments.
If you received less than the amount that you are eligible for, you will claim a credit for the remaining amount of Child Tax Credit on your 2021 tax return. If you received more than the amount you are eligible for, you may need to repay some or all of that excess payment when you file.
In January 2022, the IRS will send taxpayers Letter 6419 to provide the total amount of advance Child Tax Credit payments received in 2021.
The IRS also reminds taxpayers to claim the Recovery Rebate Credit.
Individuals who did not qualify for third Economic Impact Payments or did not receive the full amount may be eligible for the Recovery Rebate Credit based on their 2021 tax situation.
If you received the full amount for your third Economic Impact Payment, you will not include any information about it when you file your 2021 tax return.
If you are eligible for the credit, you will need to file a 2021 tax return. This is the case even if you do not usually file in order to claim the Recovery Rebate Credit, and for those who did not get the full amount of the third Economic Impact Payment.
Be aware, you need the amount of third Economic Impact Payment and any Plus-Up Payments received to calculate your 2021 Recovery Rebate Credit amount using the 2021 RRC Worksheet or tax preparation software.
The IRS will send you Letter 6475 to provide the total amount of the third Economic Impact Payment and any Plus-Up payments that you received.
If you are claiming a 2021 Recovery Rebate Credit, you will need the total amount of your third Economic Impact payment and any plus up payments to file your return accurately and avoid a refund delay.
Remember, only eligible individuals who did not qualify for a third Economic Impact Payment, or did not receive the full, amount should claim the Recovery Rebate Credit on a 2021 tax return. Do not include amounts of missing first or second stimulus payments on your 2021 return.
If you have any questions regarding your 2021 taxes, including what items you need in order to file, please reach out to your Zinner Tax Team representative.
