According to the Government Accountability Office and the Taxpayer Advocate Service, the IRS is not keeping up with paper tax returns. The COVID-19 pandemic has definitely played a factor in this as last year’s tax season was in full swing during the beginning of the pandemic. By December of 2020, the IRS had acquired a backlog of over 13.1 million tax returns. 92% of those returns were filed on paper. It is clear that the IRS is having trouble handling paper returns versus taxes that are electronically filed. Not only was this backlog an inconvenience to taxpayers but increased the cost of interest payments by 50% in 2020.
What does this mean for taxpayers?
Always file early: The minute you have all of the necessary forms you need to submit your tax return – do it. Waiting until the last month to do your taxes will only put you farther behind, especially if you’re expecting a refund in a timely manner.
Track your refund: The IRS does allow you to track your refund by visiting https://sa.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp or by downloading their mobile app for an easier way to check your refund status: https://www.irs.gov/newsroom/irs2goapp. Keep an eye on this to get a better idea of where you’re at specifically in the tax refund process.
Set up direct deposit: Not only does direct deposit help you receive your tax refund faster, but it can also help you receive your stimulus checks faster too. The IRS has stated “The best and fastest way to get your tax refund is to have it electronically deposited for free into your bank account,” so make sure you complete this step-in order to make the tax refund process easier for both you, and them.
E- file your taxes (if you can): Submitting all of your tax forms online will save you time since you aren’t relying on the postal service which can already be delayed especially around tax season. The IRS says 9 out of 10 people will receive their refund within 21 days if they file electronically using direct deposit.
As a taxpayer, it’s important to stay informed on any new tax changes the IRS implements as well as how you can make the tax preparation process easier for all parties involved.
We’re here to help you with all of these tax preparation items on your to-do list and more! Feel free to contact us at 410-224-2600 and don’t forget we’re also offering virtual appointments. Book yours today!