‘Tis the season to file your taxes.
In the first two weeks of the tax filing season, the IRS says it has issued more than $9.5 billion with the average tax refund of being $2,200. However, the IRS is urging people to file early and electronically. The agency is still dealing with staff shortages, in addition to a backlog of returns from last year because of the pandemic.
“During the past 18 months the inventory backlog has continued to snowball,” said Erin Collins, a National Taxpayer Advocate on Thursday to the Senate Finance Committee.
Filers can expect some big changes this year to the Expanded Child Tax Credit and Earned Income Tax Credits too. Americans are encouraged to pay close attention to those in particular—because any error could delay your return.
“Nobody seems to enjoy doing taxes,” said Chris Abts, President of Reno's Cornerstone Retirement.
Abts highlights another change this year.
“I would say the 401K,” said Abts. “Last year the 401K contributions was a maximum of $19,500. For this year, it’s now a maximum of $20,500.”
Abts also says that using online tools to file your refund is a practical thing to do, however, only if your taxes are relatively simple.
“If your tax return is, in your mind, is easy or simple enough that you can pick up some software like TurboTax, do that on your own, that’s great."
Abts also tells 2 News there is a difference between tax preparation and tax planning. Preparation is the act of filing your taxes. Planning, however, is looking critically at your income and deductions to get the most from the IRS.
“The way to win this game is, at that point, when you have your tax return, don’t file it away," said Abts. "Review it line item by line item as a look forward approach to say ‘hey, how can I have a better result next year?’”
The last two years, Tax Day has been delayed because of the pandemic. There are no delays this year. Tax Day is Monday April 18, 2022. You must file your taxes with the IRS by that day or request an extension.
