Before reading further, it’s important to note that the purpose of this article is to provide you with helpful information. For clarification regarding your federal income tax return, we recommend that you seek the assistance of a licensed tax professional or visit the Internal Revenue Service (IRS) website.
Are you dreading tax season? When faced with paperwork, deadlines, and 2021’s new tax laws, it’s easy to feel overwhelmed.
School of ACE is here to answer some of the top tax questions you may have and offer the best tips to help you “ace” your 2021 tax return.
1. How do I prepare for the 2022 tax season?
To get started, Forbes recommends gathering your required forms and documents, such as W-2s, 1099s, mortgage interest statements, receipts, and any other relevant information needed to file your tax return. For reference, you can use last year’s tax return to see which deductions you claimed and which are still relevant to your 2021 tax year.
2. When can I file my 2021 taxes?
Though your tax return isn’t due until April 18, 2022, you may be able file your taxes as early as January 24th. TurboTax recommends filing early to either receive your refund faster or save up for any payments you must make. Just remember, if you file later than April 18 without an extension, you will have to pay late fees. Remember that an extension is only an extension to file your return, not pay any tax due.
3. How will the new tax laws for 2022 affect filing?
The new tax laws for the 2021 and 2022 tax filings include changes regarding:
- Advance Child Tax Credit payments
- Charitable contribution deductions
- Economic Impact Payments and Recovery Rebate Credits
You can learn more about these changes and what they might mean for you at the IRS News Room.
4. Should I file my taxes online or by mail?
If your adjusted gross income (AGI) is $73,000 or less, then you are eligible to file your taxes online for free through the IRS’ partners. Just make sure to browse through each tax software’s free filing options to ensure you qualify and see if the features offered will meet your individual needs. You can also use the IRS Free File Online: Lookup Tool. This program guides you through the filing process and automatically runs the numbers for you, making your 2022 tax season simpler and easier. Filing online also gives you access to direct deposit your refund so that you may get your money faster.
5. Can I calculate my estimated refund or owed amount?
Yes! Experts in a recent CNBC article recommend using a tax calculator to see if you’ll receive a refund or owe money. Keep in mind that these calculations are only estimates and may not be entirely accurate, so wait until you file your return to make any tax-related financial decisions. The tax calculators you can use include:
6. Do I have to pay taxes on my unemployment benefits?
According to a recent Yahoo! article, you will have to pay taxes on unemployment benefits for the 2021 tax year.
If you received payments in 2021 that were intended for the 2020 tax year, however, you may qualify for an exemption. Speak with a tax professional to see if you qualify.
7. Should I hire an accountant to help with my taxes?
In the article mentioned earlier, Forbes recommends hiring a CPA if you have a small business, are an investor, or work as a freelancer. For simpler filings with only a W-2 form and a few deductions, however, you may want to avoid the cost of using a licensed tax professional and handle your taxes by yourself.
8. How can I make the 2023 tax season even easier?
Even though you are focused on the 2022 tax season, it doesn’t hurt to look ahead. The IRS recommends simplifying next year’s taxes by making sure you’ve withheld enough taxes and organizing your tax documents. You can also update documents such as your W-9 if you’ve experienced changes to your information.
Gain confidence in your finances both in and out of tax season with our helpful tips and information. Visit the School of ACE blog to learn more.