Know what the tax return extension consists of 2:47
(CNN) --
The rise in inflation.
The war in Ukraine.
Another rebound in covid-19 cases.
With so much going on this year, it's hard to focus on things like filing taxes.
However, the Internal Revenue Service (IRS) is counting on you to file your 2021 return and pay what you still owe before the filing deadline, which is this Monday, April 18 for most. the taxpayers.
Who does not have to file taxes in the US and what is the income limit?
If you haven't filed your return yet, here are the answers to some key questions to help you through the process:
Do I have to file the tax return before April 18?
Ideally yes.
But if that's hard — or you're just not in the mood — apply for an automatic six-month extension using Form 4868.
Of course, there are some taxpayers whose filing deadline is after April 18.
Among them are residents of Maine and Massachusetts, whose official filing date is April 19.
And the deadline is a month or later for people living in federally declared disaster areas, as well as US taxpayers living outside the United States on April 18.
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If I owe money, when do I have to pay it?
Most people have to pay the 2021 income taxes they still owe by the April 18 filing deadline, even if they get an automatic six-month extension to file.
What happens if I don't pay on time?
You will have to pay even more than you owe, as penalties and interest will be imposed.
If you really can't pay on time, and you have a good reason for it, you can make your case to the IRS by attaching a release to your return when you file it.
If the IRS accepts your explanation, it may waive the late payment penalty.
At a minimum, you must show that your failure to pay is not the result of "willful negligence."
To prove it, try to pay what you can at the time of filing, even if it's not the full balance.
If that's not possible and you're really behind, you may be able to set up a repayment plan with the IRS.
What if the IRS owes me money?
If you file a correct return electronically and a refund is due, the IRS will likely send that money to you or deposit it directly into your bank account within 21 days of receiving your return.
You can check the status of things using the IRS's online "Where's My Refund?" tool.
How do I file my taxes with the IRS in the US?
Know the link and the necessary documents
I was working remotely for much of 2021. Will that affect my taxes?
It depends.
If you have worked from a different state than your employer, you may be subject to the income tax rules of two or more states.
At a minimum, you'll likely need to file more than one state income tax return for 2021, which will cost you more if you pay someone else to prepare your taxes for you.
And in some cases — notably in the five states that have so-called convenience rules — you may even be taxed twice on the same income.
(Here you will find more information).
The Advance Child Tax Credit is very confusing.
How should I manage it on my tax return?
Good news: you're not imagining anything.
The child tax credit is causing headaches for filers and tax professionals alike.
There were a bunch of temporary changes made to the child tax credit for 2021 alone. For starters, it was increased to $3,600 per child age 5 and under, and to $3,000 per child age 6 to 17.
It's also temporarily made fully refundable for 2021, which means you can get the maximum amount of the credit even if you exceed your federal income tax liability.
But here's where the real confusion comes in: The IRS has probably already sent you half of the credit you're entitled to (six months' worth) via monthly checks sent between July and December.
You should have received a letter from the IRS within the last two months detailing what you have already been paid.
That is the amount you will have to report on your return.
And then you will have to claim the other half of the credit that corresponds to you, which you will receive in the form of a refund.
(Here you will find more information).
How to receive 50% of the child tax credit on the 2022 tax return?
I got a letter from the IRS saying they sent me a stimulus check.
Is it reportable and taxable?
The IRS recently sent letter 6475 to taxpayers who received a third-round stimulus payment, which the agency began sending out in March 2021.
Although the payment is not taxable, you must report that letter number on your 2021 return. The last thing you want is for there to be a discrepancy between IRS records and what appears on your return.
This will cause delays in processing your return and issuing your refund.
And you'll want to use that number to figure out whether the IRS really owes you more by way of a refund recovery credit, once you figure out how much more of the stimulus payment you're owed based on your actual 2021 income. less in 2021 than in 2020 they may be entitled to more money.
The same goes for those who had a child last year.
And for very low-income taxpayers who didn't receive any payment, filing now is your chance to claim it.
I have cryptocurrencies.
Do I have to declare that?
It depends.
The mere purchase and possession of cryptocurrencies is not a taxable item.
But, if you sold cryptocurrencies, used them to buy something or were paid with them, those are taxable events and must be declared.
Yes, the IRS can tax bitcoin and other cryptocurrencies.
This is what you should know about those taxes in the US.
Virtual currencies are taxed as property, or as an investment when sold.
To make things more confusing, using them to buy something technically counts as a sale.
Therefore, when you sell them, you will be subject to capital gains tax.
Instead, if you get paid in bitcoin or other cryptocurrencies, that will be considered taxable income for you.
The same will happen with the income obtained by mining or
staking
.
And starting next year, your cryptocurrency activities will be subject to third-party reporting, meaning both you and the IRS will receive the same tax forms reporting your sales and income.
I can't get in touch with the IRS and I have a question.
What should I do?
Taxpayers and tax professionals find it very difficult to contact the IRS by phone because the agency does not have enough staff to handle the volume of calls.
If you've already spent time searching IRS.gov information resources to find an answer to your question, you might consider an in-person visit to a Taxpayer Assistance Center near you.
Normally it is necessary to make an appointment on weekdays.
However, the IRS announced that many of its Taxpayer Assistance Centers will be open to walk-ins on the second Saturday of every month through May.
You can find your local office here.
Call first to make sure they will be open on the day you want to go.
What if my tax preparer makes a mistake on my return?
8 mistakes that can lead to an IRS audit 7:57
Honest mistakes can happen.
But remember: you are responsible for the information that appears on your return.
So check your tax preparer's work before you sign it.
The US Department of Justice also warns consumers to work only with someone reputable and competent.
Otherwise, you could be responsible for unpaid taxes, penalties, and interest.
Signs that a preparer may be scamming you: asks you to sign a blank return, won't let you review your return before filing, or wants to deposit your refund in a way you don't understand.
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