It’s almost that lovely time of the year again…’Tax Season’.
Some hate it because of the large amounts they have to pay back from their hard earned work and others are excited to get some money back.
The IRS will start accepting returns Monday, and certain families and individuals are facing smaller refunds, or no refund at all.
“There’s a lot of changes this year, especially for families with children,” said Jean Pliakas of Liberty Tax in East Providence.
She said one of the big changes is the Advance Child Tax Credit.
People who received payments throughout the year won’t have that amount of credit at tax time, and will likely get a smaller refund.
“Families have already received half of their tax credit in advance,” Pliakas said.
“If they’re used to getting a larger refund, they’re going to be a little surprised this year because they have already received half of it,” she added.
Another reality for tens of thousands of tax filers, is the unemployment collected from Jan. through Sept. is taxable.
Last year, Congress waived income tax on up to $10,200 of benefits.
This time, every dollar of unemployment in 2021 will be taxed as income.
That will reduce or wipe out refunds. Some people will owe money.
Pliakas warned the COVID-19 pandemic has created a backlog of returns from last year, let alone this year.
“The IRS is behind on millions of returns,” she said.
“I have a client that sent in her 2019 tax return. She hasn’t received anything yet. They probably haven’t even opened it yet,” she added.
That could affect when anyone who gets a refund this year.
“The IRS in charge of getting all these stimulus payments out, last year they were in charge of getting all of the advanced child tax credits out,” she said. “It’s more work than they can handle so yeah, they’re behind, they are way behind.”
She encouraged people to have all the forms they need, such as W-2’s, before heading to a professional or doing it themselves.
Pliakas said online options are a speedier way to get your returns.
“E-filing absolutely. However, you do it, E-File,” she said.
But regardless of when you start or what you’ll need, she wanted everyone to be patient.
The deadline to file is April 18.
That date has been extended the past two years due to COVID-19, but there’s no expectation the IRS will do that again in 2022.
