Stimulus Update: File Your Taxes Early if You're Due Stimulus Funds
- People who didn't receive 2021 stimulus funds can claim that money on their upcoming tax returns.
- The IRS is facing a massive backlog as the tax-filing season begins, so it pays to submit your return as early as possible if you're waiting on a missing stimulus payment.
You can claim missing stimulus money on your taxes, but you'll want to do so as soon as possible.
While the COVID-19 pandemic has caused many Americans a world of financial stress, the good news is that lawmakers made relief available in many forms. Not only did the Child Tax Credit get a big boost, but stimulus checks were made available in three separate rounds.
The most recent stimulus checks to hit Americans' bank accounts were worth up to $1,400 apiece and were approved this past March. If you didn't get that money at any point in 2021, you're not out of luck. That's because you can claim your stimulus when you file your 2021 tax return.
Recently, the IRS announced that it would begin accepting tax returns on Jan. 24. That's an improvement from last year, when the agency delayed the start of the tax season to February, forcing filers to wait longer to collect their refunds.
Meanwhile, tax returns aren't due this year until April 18. The normal filing date is April 15, but that's been pushed back a few days due to the timing of Emancipation Day, a Washington, D.C. holiday. But if you think you're owed stimulus money from 2021, you should aim to get your taxes in as soon as possible. If you don't, you might really end up with a big delay on your hands.
The IRS is already in crisis mode
The IRS had a very challenging 2021 as it struggled to keep up with incoming returns at a time when it wasn't fully staffed. And unfortunately, some of that is carrying over into the current year.
As of now, the IRS is estimated to have more than 11 million unprocessed tax returns left over from last year. And once this year's returns start piling in, the agency might really struggle to go through them.
While the IRS has reopened its field offices after shuttering them earlier on in the pandemic, like all businesses, the agency risks staffing shortages in the coming weeks due to the ongoing COVID-19 outbreak. And so the concern is that it will take the IRS longer than usual this year to process returns and issue refunds when due.
You'll need certain tax forms to file your 2021 return, like your W-2 from your employer and 1099 forms from your bank. But those documents are usually made available by late January. And so once you have them, it pays to get moving on your tax return.
It normally takes the IRS three weeks to issue refunds for returns that are filed electronically. For paper returns, the turnaround is typically double the time. But those estimates may not apply this year given the agency's staffing issues and backlog, so if you're due stimulus money, your best bet is to submit your taxes as soon as you're able to beginning on Jan. 24.
Keep in mind that if you owe the IRS more than what it owes you in the form of a missing stimulus, you won't get any money back. In that case, you'll have to write the IRS a check. But even if you file your taxes early, that money won't be due until the actual April 18 filing deadline, so there's no harm in completing your taxes sooner rather than later.
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