The IRS has reported that a record-high of 19 million U.S. taxpayers filed for an extension on their 2021 tax returns. With time running out before the October 17th tax deadline, Optima Tax Relief gives tips for extension filers.
Filing taxes for 2021 has been more complex than most recent years, as well as more uncertain. There are several credits that apply to 2021 that were not previously available. There are also shortages in IRS staff to process returns. Filing a return as soon as possible can help prevent the stress that comes with last-minute filing.
Many tax preparers suggest keeping a folder for all tax documents and paperwork. The documents needed each year can differ. For example, adults returning to school may need Form 1098-T to report qualified tuition and related expenses for that year. New homeowners may need records of mortgage statements or closing documents to help reduce tax liability. Collecting this information early and keeping it organized can help ensure a quick and efficient filing process.
Communicate With a Tax Preparer
It’s best to communicate with a tax preparer about tax credits and deductions available. There may also be new tax laws to comply with. For example, the new Schedule K-2 and K-3 forms that report relevant international tax items in partnerships are proving to be a hassle for many tax professionals. Communicating with a tax preparer early and often can help prevent delays in filing.
According to the IRS, e-filing is faster and more accurate than filing a paper tax return. Tax preparation software can detect errors, which can help prevent your return from being rejected by the IRS and delay tax refunds. Electronic tax returns are processed much faster than paper returns, which will in turn lead to receiving a tax refund sooner.