Tax experts across the country are advising that if you do nothing else this year, make sure you do one thing: File your taxes early.
Why is this so important in 2022? It seems the IRS is finding itself in the same situation as businesses all over the U.S. They are facing massive labor shortages due to the latest COVID strain, Omicron, on top of playing catch-up after getting behind schedule in 2021.
IRS Commissioner Chuck Rettig issued a statement saying, “IRS teams have been working non-stop these past several months to prepare. The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don’t face processing delays.”
Those steps are as follows:
- Make sure that you have all your paperwork in order, including your Social Security and Individual Taxpayer Identification numbers. You will need this information whether you file yourself or turn your taxes over to a pro.
- Consult IRS.gov, as tax laws change yearly and line items and processes from last year may be altered in 2022.
- This should go without saying, but be honest in your reporting. No one likes to be audited, which creates a ton of additional work and a lot of stress. If you are audited, you will be asked to provide documentation for every statement you entered on your tax form, and if you can’t, you will be fined or face heavy penalties.
- Use tools and resources that make self-filing easier. Turbotax is the number one selling software program on the market and guarantees that their information is regularly updated to reflect current state and federal laws.
- File electronically and request direct deposit. Everything runs much more efficiently this way and is highly recommended by the IRS.
You may file as early as January 24 and the experts advise that you do so. The IRS is anticipating a difficult year of processing returns due to several issues that have arisen over the past couple of years.
For starters, COVID diagnoses are continually hitting their staff hard, and these shortages are creating lag times and backlogs in paperwork. Call volume is especially problematic, and the IRS urges you to exhaust every other means of communication first before placing a call. Last year, due to staff shortages, volumes averaged one person for every 16,000 calls, according to the Treasury.
In addition, the size of the IRS workforce has remained stagnant, while the population has grown 60% since 1970. Lack of funding and resources has contributed to this problem.
Finally, child tax credits and pandemic economic impact payments that were issued last year must be claimed this year, complicating the process further.
April 18 is the deadline for filing this year, but you’d be wise to take the experts’ advice and file months earlier.