keep away from a tax submitting rejection if final yr’s return is pending

The IRS is backlogged and nonetheless sifting by way of tens of tens of millions of pending returns, together with lots of final yr’s filings. In case your 2020 return is a part of the pileup, there is a particular step on your 2021 digital submitting.

The company processed greater than 61.9 million returns as of March 11, with the bulk filed digitally and roughly half self-prepared, the IRS reported.

Whenever you self-prepare electronically, the IRS validates your submitting with the earlier yr’s adjusted gross revenue. Nevertheless, there is a completely different course of for the tens of millions of filers with a pending 2020 return.

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If final yr’s return remains to be in limbo, you will must enter $0 for your 2020 AGI when submitting on-line, mentioned Nationwide Taxpayer Advocate Erin Collins in a listening to with the Home Methods and Means Oversight Subcommittee.

“That manner you may file electronically, and you do not have to file a paper return,” she mentioned. “We have to get that message out to taxpayers.”

Whereas these instructions solely apply to digital filers, the company urges everybody to file electronically with direct deposit to avoid delays.

Almost 94.3% of particular person tax returns had been filed electronically in the course of the fiscal yr 2020, according to the IRS.

And there are similar instructions for non-filers, who usually embody sure Social Safety recipients or these with yearly revenue under the usual deductions.

Should you used the non-filer instrument in 2021 to gather the advance child tax credit payments or your stimulus verify, the IRS says to place $1 for final yr’s AGI.  

“I might assume hardly anyone is aware of about that one,” mentioned licensed monetary planner Larry Harris, director of tax providers at Parsec Monetary in Asheville, North Carolina.

Should you do not observe these directions, the IRS could not settle for your digital return, mentioned Tommy Lucas, a CFP and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

“We have seen that from people attempting to file themselves,” he mentioned, explaining how AGI conflicts could set off a complicated rejection e-mail from their tax-filing software program.  

Your return might also be pending when you received a CP80 notice a couple of lacking 2020 return.

Should you received this discover and it nonetheless hasn’t been accepted, it is best to enter $0 on your 2020 AGI when submitting this season, mentioned Lucas.

“They’ll present $0 of their system, so that is what I might begin with,” he mentioned. 

But when the IRS rejects your return with a 2020 AGI of $0, they could have processed final yr’s return after sending the discover, Lucas mentioned, that means you may refile your 2021 return along with your precise 2020 AGI.

Whereas it could be troublesome to succeed in the IRS by cellphone, you may double-check the standing of your 2020 tax return by downloading a free IRS transcript out of your on-line account.