How to prepare your tax return
MESA — Tax season will be a little different this year, from normal deadlines to IRS staffing shortages that could delay refunds. But help is available for the phobic, and it’s free for those who qualify.
Unlike the previous two tax years, when the filing deadline was delayed due to COVID-19, the due date for federal and state tax returns is back in mid-April.
The normal deadline for filing taxes is April 15, a Friday, but because the District of Columbia will observe Emancipation Day that day, taxes for 2021 are due April 18, said attorney Rory Wilson. tax policy principal for the Arizona Department of Revenue.
“The due date (2020) was pushed back to July 15, then the following year the deadline was pushed back to May 17, so we finally went back to what we call ‘the normal due date’ “, did he declare.
The IRS expects to receive about 3.4 million personal tax returns in Arizona, and it expects 300,000 Arizonans to file for a six-month extension.
“The IRS strongly encourages taxpayers to prepare accordingly this filing season,” said IRS spokesperson Yvi Serbones Hernandez. “They should also file electronically and choose direct deposit for faster refunds and visit Where’s My Refund on IRS.gov to check their refund status after they file.”
As of Feb. 18, Hernandez said, the IRS had issued more than 22 million refunds worth more than $78 million, with the average refund being $3,536. She also said that 9 out of 10 taxpayers can expect to receive their refund within 21 days if they file their returns electronically and have direct deposit.
Wilson said many factors are making this tax filing season different — from a backlog of cases to staffing shortages — that could lead to delays in the dispersal of tax returns.
The Government Executive business group said staffing shortages were so severe that “in the first half of 2021, the IRS had one employee for every 16,000 incoming calls”.
“Arizona doesn’t have the same backlog, but to that extent you can file electronically because it’s definitely a lot faster to get your refund that way,” Wilson said. “What we found by looking at the data is that if you’re waiting for a tax refund, if you use e-file, you’ll get your refund six times faster.”
Child tax credit, stimulus checks add wrinkles
The US bailout added some temporary changes to the Child Tax Credit, such as increasing the amount of money taxpayers can receive, making the credit available to eligible children who turn 17. in 2021, making the credit fully refundable for most taxpayers and allowing many taxpayers to receive half of the estimated credit for 2021 in advance, according to the IRS.
Prior to 2021, the tax credit was worth up to $2,000 per child with a refundable limit of $1,400. The IRS said the new law increases the credit to $3,000 per child ages 6 to 17 and $3,600 per child 5 or younger.
According to the Time Tax Guide. The same goes for stimulus checks.
People eligible for stimulus checks who have already received their third should not include information about it when filing 2021 taxes, but others may be eligible for the 2021 recovery rebate credit, which could reduce taxes due for 2021.
Taxpayers can find the total amount of their third stimulus check through their IRS account online, or wait to receive an official letter.
Changes relate to small businesses, military pensions
State level taxes have some changes for some filers. One of the biggest changes, Wilson said, is to the small business income tax.
According to the state Department of Revenue, this “allows individual taxpayers to elect to take their ‘Arizona Small Business Adjusted Gross Income’ off their personal income tax return and tax it on a ‘Return of Income’. Arizona small business income “.”
Wilson said this is also the first year that all Arizona veterans’ military pensions have been completely exempt from tax.
“Historically, military taxpayers got a $2,500 subtraction,” Wilson said. “In recent years it’s gone up to $3,500 and for the first time ever it’s starting with the 2021 tax year to file in 2022 with a 100% exclusion, so that’s a really big advantage. “
Other changes are related to AZ529 education plans and the U.S. rescue plan, Wilson said.
AZ529 plans are “state-sponsored savings plans designed to provide a parent, grandparent, or prospective student the opportunity to save for college expenses on a tax-deferred basis,” according to the Arizona Department of Benefits. In previous years, these plans allowed taxpayers to contribute $2,000 for single filers and $4,000 for married filers jointly. Now, Wilson said, those caps apply per beneficiary.
As part of the US bailout, passed by Congress last year, the federal government excluded unemployment income up to $10,200 for those earning less than $150,000. Wilson said 2020 Arizona filings can still be modified if filers were unemployed in 2020, to accommodate the up to $10,200 disqualification for that year as well.
“Thousands of taxpayers may not know they should have changed their 2020 Arizona return, so they should talk about it when they meet with their tax preparer to file their 2021 taxes due in 2022,” said Wilson.
“If you don’t have all your information yet, file an extension. Arizona is honoring the federal extension, and the federal extension is pushing it back this year until October 17.
Wilson also recommended consulting a volunteer tax assistance group, such as the Volunteer Income Tax Association (VITA) or AARP, to help make the filing process easier for eligible individuals.
How to get free tax help
VITA is a free IRS filing service for taxpayers who earn $58,000 per year or less, who have a disability or limited English skills. Taxpayers can go to their local VITA location with all tax forms, where a volunteer will file their taxes and process their return.
Alan Floth, the VITA site coordinator on Mesa Community College’s main campus, has been helping people file their taxes for 12 years. He said most professional prep services will pay federal taxes for free, but charge for filing state taxes. But thanks to VITA, everything is free.
“A lot of people who come to us are math phobic, they’re tax phobic, but (taxes) really aren’t that hard,” he said.
Floth said people think doing taxes is difficult because of different filing statuses and living situations, such as whether a filer is a head of household or a qualified widower.
Taxpayers who wish to file through VITA complete a form listing all status, life events, income, and expenses for the previous year, and, along with tax information on forms such as W-2, 1099, or 1098, a voluntary will go online -online with them to verify all information. If all information is correct, the volunteer will submit the taxes to a volunteer accountant, who will electronically file state and federal taxes and await processing by the IRS.
“You give us the documents, and we do the taxes from there,” Floth said.
Taxpayers going through VITA must bring all relevant tax documents and documents, a social security card or individual tax identification number, and photo ID.
Luis Martinez has filed his taxes through VITA since he started doing his own taxes three years ago. He said it was better than trying to drop them off himself because the volunteers make the process so much easier for him.
“I really like how the volunteers help you through the process,” he said. “They are very good at helping you and telling you where to put what in the forms.”