As Tax Filing Season Gets Underway There Are Options To Speed Up Your Return
IRS Dealing With Massive Backlog of Returns and Staffing Shortages
Tax filing season began yesterday, and US Treasury officials warn there could be delays in processing your return. The IRS is dealing with a number of people out sick amid the pandemic, and there’s already a backlog. In an average year taxpayers wait around 21 days for their refund, but many waited longer in 2021.
As of December last year, millions of returns remained unprocessed. Financial planners say those numbers are alarming and speak to the extent of the backlog. For years advisors have suggested filing electronically and using direct deposit, but other options are available as well.
Check Your Return for Errors Before Sending to Speed Things Up
CPAs from around the country say double-checking your return for inaccurate information is a great way to speed things up. Anytime a computer flags a return for a manual review the backlog grows. IRS officials say they are fixing a much higher number of errors than in previous years.
Another wrinkle this year is the 2021 stimulus check and advance child tax credit programs, which affect specific forms needed to submit. Letter 1649 applies to child tax credits, while Letter 6475 is for stimulus checks. Taxpayers are advised to download a copy of an IRS transcript to verify the amounts associated with both stimulus checks and the child tax credit.
Identify Theft Remains A Big Problem, Delaying Returns
In 2020 the IRS stopped 1.9 million returns for identity screening, representing over 30% of all returns flagged for fraud. Whenever fraud is suspected the return is halted and a letter goes out to verify the filer’s identity. The process is delayed even further when people key in the wrong address or apartment number, which is more common when people recently moved locations.
If you receive a letter suspecting identity theft, advisors recommend calling the number provided or going to an IRS office in person. Still, staffing shortages are a big issue, with one person typically available for every 16,000 inbound phone calls. Filing online and using direct deposit are long standing tips towards speeding up your return, but making sure to double check for errors and inaccurate contact information are also strongly recommended.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.