Latest News / How to Avoid Tax Filing Headaches in 2022
How to Avoid Tax Filing Headaches in 2022
February 16, 2022
Taxpayers have a few extra days to prepare and file their returns this year. The deadline to submit 2021 tax returns or an extension to file and pay tax owed is Monday, April 18, 2022. However, you may want to think twice about waiting until the last minute. That’s because a significant backlog of work at the Internal Revenue Service (IRS), coupled with a number of new tax law provisions, is expected to result in delays and complications for some filers. To reduce the chance that you will be among them, the IRS urges taxpayers to file their 2021 returns as early as possible.
According to the Taxpayer Advocate Service, an independent organization within the IRS, the COVID-19 pandemic has created ongoing challenges for the agency, beginning with office closures during the early days of the pandemic. COVID relief legislation signed into law in late 2020 and early 2021 also provided the agency little time to gets its arms around new tax laws and provisions before the 2021 tax filing deadline, creating a significant backlog in processing returns In addition, budget cuts have resulted in fewer employees available to handle the growing workload.1
5 steps you can take now to avoid tax filing headaches
According to the IRS, there are several ways to help ensure timely processing of your returns this tax season:2
1. Gather your records in advance, including W-2s and 1099s. Don’t forget to save a copy for your files.
2. Get the right forms. Tax forms are available at IRS.gov under “Forms and Publications.”
3. File electronically versus mailing returns.
4. Provide the IRS with your bank routing information so any refund can be directly deposited to your account.
5. Check your numbers. Mistakes are a leading cause of delays in processing taxpayer returns.
If you have questions about your taxes or preparing your returns, schedule time to meet with a professional tax advisor who can provide advice specific to your needs and circumstances. If you or someone you know cannot afford to work with a tax professional, free assistance is available through the IRS’s Interactive Tax Assistant tool, or to qualified taxpayers through its Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs. Visit IRS.gov to learn more about these resources. If you have questions about tax-smart savings, investment or retirement income strategies, contact the office to schedule a time to talk.
Rising Inflation Got You Down? Try These 5 Tips to Save More on Everyday Expenses
Consumer prices continue to climb at the fastest pace in decades. As noted in Cetera Investment Management’s 2022 Outlook, supply chain disruptions are a leading cause of rising inflation, along with disruptions in the labor markets, which is creating competition for employers to hire candidates and driving up salaries and wages. Rising labor costs factor into production costs and ultimately result in higher prices for consumers.1 While inflation impacts everyone, it’s most acutely felt by those living on a fixed income, including many retirees.
Below are five tips to help you close the gap between rising prices and your budget.
1. Order online: Online shopping can help you avoid in-store impulse purchases, such as “buy one, get one free” deals on items you may not need. Also, avoid shopping when you’re hungry. One study found that department store shoppers who reported being hungry spent 64% more money than less hungry customers, even after accounting for factors such as mood and length of time spent in the store.2
2. Buy generic: Whether it’s prescription drugs, over-the-counter medications, food, personal hygiene or cleaning products, you’re likely to pay far more for major brands. Often, the generic version is actually the same product at a lower cost. That’s because many store brands are manufactured by big brand companies under a “private label,” specifically for that retailer.
3. Reduce home energy costs: Taking steps to close off unused rooms, clean or replace furnace filters, address gaps around windows and doors, and repair leaky faucets can all help to cut high energy costs at home. In addition, many service providers, including gas and electric companies, will conduct a free energy audit of your home to help identify ways to use energy more efficiently and reduce costs over time.
4. Plan to drive less: High gas prices can put a real dent in your budget. Fortunately, planning ahead can help minimize the damage. Using an app like GasBuddy can help you find the lowest prices at the pump, locally or when traveling. Consider “bunching” errands and appointments to avoid unnecessary trips. Shopping online or having groceries delivered can also reduce gas consumption, but make sure delivery fees don’t eat up any potential savings.
5. Take advantage of senior and member discounts: If you’re age 62 or over, you may qualify for special offers or discounts at a number of stores and restaurants, as well as travel, cultural, and entertainment venues. Don’t forget about membership organizations and rewards programs, such as AARP, AAA, credit card providers, hotels, airlines, etc. Many offer substantial savings on goods and services, regardless of your age.
2 http://news.usc.edu/78755/are-you-hungry-best-to-eat-first-and-shop-later-studyfinds/#:~:text=The%20results%20showed%20that%20the,time%20spent%20in%20the %20store
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