Tips for Tax Day 2022
Tax Day in the US - April 18th this year - is quickly approaching, and it is important to be properly prepared. You want to make sure your forms, documents, and information are all correct and appropriately organized to make filing taxes as seamless as possible. Because we all know the stress filing your taxes can bring!
A checklist to remember before filing:
Whether you’re utilizing a self-service software or meeting with a tax expert, having all of the important tax-related information on hand will make the process easier to navigate. This handy checklist will help you prepare:
- Gather all tax forms from your employers, gig work, and investments. Examples of forms that entertainment industry workers may receive are multiple W2s, a 1099NEC (for a Loanout or independent contract work) a 1099MISC (for box rentals), or form 1095 (for healthcare coverage).
- Verify correct information on all tax forms. Log on to MyEP and review your earnings to see if you have all your forms, and if information, like your resident address, is correct. If information is missing or incorrect, you can easily update it directly on the site.
- Confirm the correct social security number is on all your tax forms. If it is not correct, for EP forms, contact email@example.com. If not through EP, contact the employer or business that sent you the form and request a correction.
- Know what tax credits you qualify for. For instance, if you have a child (or children) and earned income under $57,414 in 2021, you may be eligible for the Earned Income Tax Credit (see more information below).
- Have all your direct deposit information handy, you’ll get your refund faster!
How do you file your taxes?
If you are filing electronically, you will usually receive your refund check within 3 weeks of the date when the IRS receives your return. Your refund will come even faster if you elect to have it directly deposited into your checking or savings account! To review the various electronic filing options, including Free File, you can visit this IRS website for more information.
On the other hand, if you mail a paper Form 1040, U.S. Individual Income Tax Return, it can take the IRS 6 to 8 weeks to process your return. Make sure you mail it to the right address for your area AND for your situation, because there are different addresses when you enclose a payment!
If you are unsure if you are using the correct address or would like to double check, the IRS has constructed a list of all addresses for taxpayers and tax professionals, which can be found here.
Other important reminders
1. How to get your refund fast, using direct deposit:
The quickest (and easiest) way for you to get your tax refund is by filing electronically and choosing direct deposit. This gives you access to your refund faster than a paper check, by up to 3 weeks!
Eight out of 10 taxpayers get their refunds by using direct deposit - there are various benefits in addition to receiving the refund sooner than a paper check. Direct deposit avoids the possibility that a refund check could be lost, stolen, or returned to the IRS as undeliverable, and it saves taxpayer money. It also lowers costs for issuing refunds; each paper check costs over $1 to print and process, while a refund issued by direct deposit costs only a dime.
2. How to claim a Recovery Rebate Credit:
Individuals who did not qualify for a third Economic Impact Payment, or EIP, or did not receive the full amount, may be eligible for the Recovery Rebate Credit (RCC). The RCC is a credit an individual may claim if they are missing a stimulus payment, or got less than the full amount they were eligible for, based on their 2021 tax situation. The fastest way to get your tax refund, including your Recovery Rebate Credit, is by filing electronically and choosing direct deposit.
- If you received the full amount for your third Economic Impact Payment, then you will not include any information about it when you file your 2021 tax return.
- If you are eligible for the RCC due to missing or incomplete funds, you will need to file a 2021 tax return even if you don't usually file, in order to claim the Recovery Rebate Credit.
Avoid processing delays that slow your refund by filing an accurate return. You will need the amount of the third EIP and any Plus-Up Payments you received to calculate your 2021 Recovery Rebate Credit amount, using the 2021 RRC Worksheet or tax preparation software.
In early 2022, the IRS issued Letter 6475 to provide the total amount of the third Economic Impact Payment and any Plus-Up payments that you received. You must keep this, and any other IRS letters you received about your stimulus payments, with your tax records and refer to them when you file. However, if you lose these documents, you can log in to your online IRS account to securely access your EIP amounts.
Remember, only eligible individuals who did not qualify for a third Economic Impact Payment, or did not receive the full amount, should claim the Recovery Rebate Credit on a 2021 tax return. Do not include amounts of missing first or second stimulus payments on your 2021 return.
3. How to claim the Earned Income Tax Credit if you have qualifying children:
As mentioned above, if you have a child (or children) and earned income under $57,414 in 2021, you may be eligible for the Earned Income Tax Credit. Low to moderate-income workers with qualifying children may be eligible to claim the Earned Income Tax Credit (EITC) if certain qualifying rules apply to them.
To qualify for the EITC, you must meet these basic qualifying rules:
- Have worked and earned income under $57,414
- Have investment income below $10,000 in the tax year 2021
- Have a valid Social Security number by the due date of your 2021 return (including extensions)
- Be a U.S. citizen or a resident alien for all of 2021
- Not file Form 2555 (related to foreign earned income)
But you may still qualify for the EITC even if you can’t claim children on your tax return. Find out how to claim the EITC without a qualifying child.
4. How to sign a paper tax return on someone else’s behalf:
There are a few instances when you may need to sign a return on someone's behalf. If this ocurs, it is important to follow the exact steps outlined by the IRS. Here are three examples of when and how to sign someone else's return:
- Filing a joint return: To file a joint tax return, both spouses must sign the return. If your spouse cannot sign because of a medical condition and requests that you sign the return on their behalf, sign your spouse's name in the proper place, followed by the word "by" then your signature, followed by the word "husband" or "wife." Be sure to also sign in the regular space provided for your signature. Attach a statement that includes the form number of the return you're filing, the tax year, the reason your spouse cannot sign the return, and that your spouse has agreed to your signing for him or her. If you are the guardian for your spouse who is mentally incompetent, you may sign the return for your spouse as "guardian."
- Filing on behalf of a spouse: If there is any other reason your spouse cannot sign their tax return, you may only sign it if you have a valid power of attorney, and you should attach the document granting you power of attorney to the return. You may use Form 2848, Power of Attorney and Declaration of Representative, for this purpose.
- Filing for a child or a minor: Lastly, you could also be filing a return for a minor or child who cannot sign it themselves. Minors must file a tax return if their earned income is greater than $12,550 in 2021. If this is the case, sign the child's name followed by the word "by," your signature, and your relationship, such as "parent" or "guardian” of minor or child.
Now you are ready to file your taxes! All these tips and tricks are meant to save you time and money this Tax Day and make it as easy as possible to complete your filing. Still have questions? For more information, please contact EP at firstname.lastname@example.org or visit the IRS website.