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Tax filers face delays because the IRS grapples with restricted staffing

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Tax season begins on Jan. 24 and filers ought to anticipate delays because the IRS combats a backlog and restricted staffing, Treasury officers say.

The IRS nonetheless had not processed 6 million particular person returns already submitted by taxpayers as of Dec. 23, based on the company, and the state of affairs may get worse as the new tax season kicks off.

“In lots of areas, we’re unable to ship the quantity of service and enforcement that our taxpayers and tax system deserves and wishes,” IRS Commissioner Chuck Rettig said in a statement.

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There have been fewer than 15,000 staff to deal with the 240 million incoming calls throughout the first half of 2021, which is one particular person for each 16,000 calls.

And solely 7% of taxpayers reached an agent throughout final 12 months’s submitting season, based on Taxpayer Advocate Service’s mid-year report.

Nevertheless, it’s possible you’ll keep away from delays by submitting electronically with direct deposit, Rettig stated, and look ahead to errors — particularly for stimulus and advance little one tax credit score funds — which can require a guide evaluation.

This is what else to know earlier than submitting your return.

Advance little one tax credit score funds

The American Rescue Plan boosted the child tax credit to $3,000 for households with children ages 17 and below for 2021, with an additional $600 for youngsters below 6.

Whereas thousands and thousands of People have obtained superior credit, filers who earned greater than anticipated may need to pay some of it back, specialists say.

To qualify for the complete credit score, single filers want a modified adjusted gross earnings of lower than $75,000 and married {couples} submitting collectively should earn below $150,000.

You must watch for Letter 6419 from the IRS to reconcile funds, stated licensed monetary planner Larry Harris, director of tax companies at Parsec Monetary in Asheville, North Carolina.

Get your return filed as rapidly as potential.

Larry Harris

Director of tax companies at Parsec Monetary

You might also tally advance credit by evaluating financial institution statements to IRS data within the Child Tax Credit Update Portal.

Harris suggests beginning the submitting course of early as many taxpayers had 2020 refund delays associated to stimulus funds.

“Get your return filed as rapidly as potential,” he stated. “That can at the least get the wheels turning on what may presumably be one other sluggish 12 months for IRS processing.”

Stimulus cost

People began getting the third spherical of stimulus funds of as much as $1,400 in March 2021 as a part of the $1.9 trillion American Rescue Plan. 

In the event you obtained a examine, preserve your eyes on the mail for Letter 6475, masking what the IRS despatched in 2021 and what’s nonetheless because of different recipients. 

And should you’re owed a stimulus cost, there’s still time to claim it by submitting your 2021 tax return, based on the IRS.

Medical insurance subsidies

Congress additionally increased health insurance premium subsidies in March, making protection extra reasonably priced for thousands and thousands of People.

Whereas the trade has quickly capped premiums at 8.5% of family earnings, you could have to repay a few of the advantages if earnings exceed the thresholds for 2021. 

“It may well actually be a really disagreeable and hectic state of affairs for these people that need to pay a reimbursement,” stated Harris.

Nevertheless, you can begin working with a tax skilled early to mission 2021 earnings now to estimate legal responsibility and put aside cash for a future invoice, he instructed.

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