Happy New Year! Soon Americans will be filing their 2021 tax returns. Here are some important dates for this year.
- Jan. 31 – When the IRS will start processing tax returns filed in 2022
- Feb. 15 – When the IRS will start processing tax returns with Earned Income Tax Credit and additional Child Tax Credit
- April 18 – Deadline to file your tax return or to file for an Automatic Extension.
Maybe you make New Year’s Resolutions, maybe you don’t. But these Four New Year’s Tax Resolutions are a good idea for everyone:
- Set up your online tax account at irs.gov. This account allows you access to your tax records, payment information, and much more. The IRS has been slowly expanding what can be done through this account so it is a good idea to have it all set up.
- Get organized. Have a system in place to collect tax documents and other documents (like receipts). Having both a physical folder and an electronic folder for each tax year usually makes sense. If you have self-employment or business income the record keeping is more complicated and the IRS provides some guidance here.
- Keep up with tax changes. There are many ways to do this. My favorite way is to subscribe to IRS email newsletters. The IRS offers several, you can choose which ones make sense for you.
- Make sure you withhold the right amount for Federal income taxes or start estimated tax payments. The right amount of withholding depends on your goal – are you trying to get no refund or is your goal to have a specific amount for a refund? The IRS provides a tool to help with this, the W-4 estimator. You should revisit tax withholding or estimated payments whenever your income or your tax situation changes. It isn’t just for tax time.