Tax-filing season begins Jan. 24, IRS says

The Internal Revenue Service (IRS) announced that the new tax season would begin on January 24. It marks the beginning of the new financial year and the end of accepting the tax returns from 2021.

As the U.S. tax filing season begins in two weeks, Treasury officials have warned on Monday that taxpayers need to be prepared for delays as returns and refunds will be processed and for difficulties in reaching the IRS.

What does this mean for taxpayers?

The Internal Revenue Service reports that it will allow the agency time to perform programming and testing to ensure that their systems run smoothly, ahead of the start.

At the same time, the IRS precautions that the upcoming filing season could be infuriating for taxpayers and tax preparers correspondingly due to pandemic causing delays, a backlog of unprocessed tax returns from 2021, and years of budget cuts that have made the job more difficult.

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What can you expect this tax season? Read on for essential deadlines, date extensions and filing resources.

The IRS says that taxpayers seek help online and use phone lines if mandated.

The agency says if you file electronically, go for direct deposit. If your returns go through successfully, you should get your refund within 21 days.

The tax filing season for 2022:

Tax returns can be filed as early as January 24 2022. 

Taxpayers in Maine and Massachusetts have until April 19 to file and pay their liabilities owing to the Patriots’ Day holiday in those states.

If you need extra time to file your taxes, you can request an extension with Form 4868. If approved, your last day to file your federal income tax return is October 17, 2022. If you know you owe taxes, you will still need to pay an estimation before April 18, regardless of being granted a filing extension. It’s advisable to pay your due tax liability when filing Form 4868 to avoid extra penalties.

In a news release, IRS Commissioner Chuck Rettig said that the process is a massive undertaking.

The agency encourages everyone to have all the information to file a complete and accurate return. An authentic tax return can help you avoid processing delays, refund delays, and later receiving IRS notices for not paying them on time.

It is critical for people who have received advance Child Tax Credit payments or Economic Impact Payments in 2021, as they will need the amounts of these payments when preparing their tax returns.

Like last year, individuals filing tax returns will need to file a 2021 return to claim a Recovery Rebate Credit to receive the tax credit from 2021 to reconcile payments of the Child Tax Credit.

What happens if you miss the tax deadline?

There is no penalty for filing late if you are owed a refund, though this may differ for your state taxes. Nevertheless, it’s best to file the tax electronically or postmark your tax return as early as possible.

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Suppose you owe the IRS, penalties and interest start to accrue on any remaining unpaid taxes after the filing deadline. The late-filing penalty is 5% of the taxes due for each month your return is behind, with fees increasing to up to 25% of your unpaid balance after 60 days have passed. You may also incur a penalty for paying late, 0.5% of the taxes due for each month your return is late, with penalties increasing to up to 25% of your unpaid tax, counting on how long you take to file.

Officials tipped off good news for those serving in the military, a contingency operation in support of armed forces or a combat zone as they can be granted additional time to file their taxes.

How do I file my taxes online?

The IRS delivers a list of free online tax prep software called an IRS Free File that many providers offer. This unrestricted service can meet specific criteria and have a relatively simple tax situation.

As the date of filing returns grows closer, taxpayers need to be prepared in advance for delays as their returns and refunds are processed. Post the pandemic. The IRS says they have geared up to welcome the new tax season for 2022.