2022 Tax Season: 10 Tips to Make Filing Easier

man and woman couple filing taxes with guidance from tax advisor

The 2022 tax season brings new complexities—including new tax breaks and credits—that could make this year's taxes both more challenging and more rewarding.

Among the big issues this year are reconciling child tax credit and stimulus payments, accounting for investment and gig income and filing accurate returns. The best overall advice: E-file to avoid an IRS backlog of paper returns, and get help if you need it.

Here are 10 more 2022 tax tips to help you file your return this year.

1. Start Early to Avoid Delays

According to the IRS, this year's filing season could be a tough one, with IRS employees working hard to answer questions about new and potentially confusing filing requirements. If your return is flagged for review, your refund will almost certainly be delayed. What helps?

If your tax return is simple (filed as a single W-2 with standardized deductions), get it done early and e-file. Avoid potential mail delays by setting up direct deposit with the IRS.

If your tax return is more complex, gather your information and engage the help you'll need ASAP. The sooner you start the process, the more time you'll have to track down missing information, smooth out discrepancies or find a qualified tax professional.

2. File an Accurate Return

Inaccuracies are a common trigger for an IRS audit. The IRS matches information you provide on your tax return with W-2 forms from your employer; 1099s from clients, banks or investment companies; and payment data from the government itself. If your tax return differs from what the IRS has on file, it may be flagged for a manual review, which could lead to a full-blown audit and possibly delay your refund.

Before you file, check your return for accuracy against the information the IRS has on file. Get a free digital copy of your tax transcript by visiting the IRS' Get Your Tax Record site.

3. Plan for an Extension Now if You Need One

If you can't get your tax information together by the April 18 deadline, you can file an extension to automatically move your deadline to October 17. But don't wait to pay the taxes you owe: The IRS expects you to make a good faith estimate if you want to avoid penalties and interest. Also be mindful of all IRS deadlines this year, including estimated tax payments for 2022.

4. Claim Child Tax Credits

Parents may be eligible for child tax credits of $3,000 to $3,600 per child for the 2021 tax year. If you qualify, you may already have received half of your available credits as advance child tax credit payments between July and December. You can claim the remaining half of your credits on your 2021 taxes using Schedule 8812.

Make sure to double-check for accuracy. If your numbers don't match up with IRS data, the agency will flag your return. You can check your numbers using IRS Letter 6419, which details how much taxpayers have received in advance child tax credit payments. If you can't find your IRS letter, use your tax transcript to verify your economic impact payment amounts.

5. Reconcile Stimulus Payments and Recovery Rebate Credit

If you received a third stimulus payment in 2021, you should have received IRS Letter 6475 documenting it. You can also check your tax transcript for payment details. This information can help you determine whether to claim the Recovery Rebate Credit on your 2021 tax return. The Recovery Rebate Credit is for taxpayers who still have not received the full amount of stimulus due to them in the previous three rounds of stimulus payments—at this point, a rare occurrence.

6. Don't Miss Out on a 2021 Charity Deduction

Taxpayers who take the standard deduction instead of itemizing normally can't claim a deduction for charity donations. For the 2021 tax year, however, you can claim up to $300 in donations ($600 for married couples filing jointly), even if you don't itemize. Donations must be made to a qualifying charity and the deduction applies only to cash donations and non-reimbursable expenses related to volunteering.

For 2021 only, you can also claim a deduction of up to 100% of your adjusted gross income if you made a qualifying donation of that size.

7. Consider These Additional Credits and Deductions

  • Child and Dependent Care Credit: You may be eligible to receive a Child and Dependent Care Credit for up to 50% of eligible work-related care expenses in 2021 as part of the American Rescue Plan. That's a maximum credit of $4,000 for one qualifying person or $8,000 for two or more people.
  • Out-of-pocket medical or dental expenses: If these exceed 7.5% of your adjusted gross income, they may be deductible if you itemize your deductions.
  • Earned income tax credit: If you worked in 2021 and had an income of less than $57,414, you may be eligible for the refundable earned income tax credit.

8. Don't Forget Unemployment Benefits

Unlike 2020's tax breaks, benefits you received in 2021 are taxable, so don't forget to report this income on your return. If you didn't have taxes withheld from your benefit payments, you may owe additional tax.

9. Count Gig Work as Income

If you earned money in the gig economy—driving for a delivery app, renting out a parking space or doing doggie daycare at home, for example—you must report your income and pay taxes on it. Depending on whether you've worked as an employee or a contractor, you may need to file Schedule C: Profit or Loss from Business. The good news: If you are considered self-employed, you may be able to deduct some car or home office expenses. The bad news: Business taxes can be a bit more complicated. For more, visit the IRS' Gig Economy Tax Center.

10. Report Profit on Investments, Including Cryptocurrency

Remember that capital gains taxes aren't based on the value of your investments: They're based on the profits you realize when you sell an investment for more than you paid. If you didn't sell anything in 2021, you don't owe anything. However, if you sold stocks, mutual funds, real estate, cryptocurrency or another investment for a profit, you must report the gain (or loss) on your tax return and pay applicable capital gains taxes.

Get Set and Go

Using IRS hotlines may be challenging this year, so the IRS offers online resources that may help answer your questions. Their guide to getting a jump on your 2021 taxes offers tips for preparing and tracking your return, including electronic filing options for individuals and resources for e-filing your return—the fastest route to a refund this year.

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