Monday, April 18th, is the deadline to file your taxes. Filing your taxes in the post-COVID era can be complicated and confusing. Laws are changing all the time. For instance, the standard deduction increased to $12,550 for single filers and $25,100 for married couples filing jointly and income tax brackets increased to account for inflation.
“There are still about 24 million tax returns, mine included, that have yet to get processed by the IRS.” Joel Garris, JD, President & CEO, Nelson Financial Planning told Ivanhoe.
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The first thing to expect this tax season is to not expect your refund anytime soon and due to IRS staff shortages, don’t even try to call and complain.
“According to the latest statistics, there were 32 million phone calls that they have the capacity to answer in a given year. Last year, they got 250 million phone calls. So about 90 percent of the phone calls to the IRS simply go unanswered.” explained Garris.
Did you or didn’t you get your stimulus check?
“A lot of folks might not have seen that in their mail or might have thought it was junk mail. And so they now have to go through the process then of claiming that stimulus check, if they didn’t get it on their tax return.” Stated Garris.
The child tax credit is causing confusion as well. Many people only received half last year and are now eligible for the other half.
“So, the other half could be as much as $1,500 to $1,800 per child,” Garris explained.
Another misconception, no extra charitable donations can be written off. A standard deduction is $300 for singles and $600 if you’re filing jointly, but there is some wiggle room.
“There’s an ability to write off donations to charity that is above and beyond your standard deduction. And it can be a deduction of another $600 for a married couple.” Garris told Ivanhoe.
But those donations must be made with either cash or check.
This is the first year in three years where we have not had any additional time as taxpayers to make that tax return filing. You have until Monday, April 18th, to file or you can file for an extension. Filing an extension form online gives you until October 15th to file a return. To get the extension, you must estimate your tax liability and need to pay any amount due by April 18th. But be aware, if you underestimate how much you owe, you could be hit with some pretty significant penalties.
Sources: https://www.npr.org/2022/01/28/1076363837/filing-taxes-2022-return
Contributor(s) to this news report include: Marsha Lewis, Producer; Bob Walko Editor. To receive a free weekly email on Smart Living from Ivanhoe, sign up at: http://www.ivanhoe.com/ftk