The IRS Is Now Warning You to Do This Before Filing Your Taxes
This is an important first step when submitting your tax return this year.
The new tax season began just a little more than a week ago and it's already shaping up to be another complicated and frustrating year for many taxpayers. And while some people prefer to put their taxes off until the very last minute, others try to get them done as soon as possible to get it all out of the way. But immediately jumping into the process may actually cause more stress later. In fact, the IRS is now warning taxpayers that they need to do one thing in particular before filing their 2021 tax return. Read on to find out what the agency says you should do first.
The IRS is warning taxpayers not to file their returns until they've gathered all their documents.
While you might be eager to get your taxes done as soon as possible, there may be reason to wait. On Feb. 1, the IRS sent out a new notice to taxpayers, warning them to not file their 2021 tax return before they're ready. The agency began accepting and processing returns on Jan. 24, but most people have until April 18 to get theirs in. Some exceptions include taxpayers in Maine and Massachusetts who have a later deadline of April 19 to file their returns because of a holiday in those states. According to the IRS, you should wait and gather all the forms you need before trying to file your return.
"While taxpayers should not file late, they also should not file prematurely," the IRS warned. "People who file before they receive all the proper tax reporting documents risk making a mistake that may lead to processing delays."
There are two new letters from the IRS that you should be aware of this year.
The IRS should be sending out two new letters this year that will help with filing your return: Letter 6419 and Letter 6475. The first deals with advanced child tax credits and should include the total amount of advanced payments that were issued to you, as well as the number of qualifying children that were used to calculate the early credit.
"People need this important information to accurately claim the other half of the 2021 Child Tax Credit when filing their 2021 tax return and prevent delays in processing," the IRS said.
Taxpayers should also receive Letter 6475, which references the third Economic Impact Payment. While most recipients eligible for this stimulus check have already received their money in full, some taxpayers might now be eligible or entitled to more money based on their 2021 tax information by claiming a Recovery Rebate Credit on their upcoming tax return. Those people will need this form to confirm how much of the third stimulus check they already received from the government, if they got any at all.
RELATED: For more finance news, sign up for our daily newsletter.
But these are not the only documents you will likely need to file your return.
Alongside the two new letters, there are a number of other forms the IRS said taxpayers should wait to receive before they file their 2021 tax return. This includes, but is not limited to, W-2 forms from employers, as well as 1099 forms from banks, issuing agencies, and other payers. "Organized tax records make preparing a complete and accurate tax return easier and may help taxpayers find overlooked deductions or credits," the IRS said.
These forms are meant to prevent you from including errors on your return. Errors, especially those concerning the child tax credit or stimulus payment, can result in processing delays for your return which will prevent you from getting your refund in a timely manner. "Taxpayers should review them carefully. If any of the information shown is inaccurate or not available, taxpayers should contact the payer right away for a correction or to ensure they have their current mailing or email address," the IRS said.
If your forms haven't arrived by mail, you should be able to view them online.
It isn't just that you might need to find and organize the documents already in your possession. According to the IRS, some important information might still be on its way to you, as year-end forms started arriving by mail in January. But if you want to go ahead and file even if you aren't sure you have all your documents, you can actually view them online. With your IRS Online Account, you can see the total amount of stimulus payments you were issued in the 2021 tax year, the total amount of advanced child tax credit payments, your adjusted gross income from your last tax return, the total of any estimated tax payments you made, and any refunds that were applied as credit.
"[Taxpayers] can also now make and track payments and manage communication preferences, including the option to go paperless and request email notifications for certain notices available online," the agency noted. "Taxpayers are encouraged to register for an online account, if they haven't already, or sign in to access this information and explore these new features."