Last Minute Tax Filers: Don’t Make These Mistakes

Did you wait until the last minute to get to work on your 2021 tax return? Well, you’re in good company. Statistics show many Americans put off completing their return until just days before the deadline. If you’re among the procrastinators and will be tackling your 2021 return this week, we have some last-minute advice to share. We also have information on some of the most common mistakes the IRS is seeing as people file this year.

Deadline date

As you surely know by now, the tax filing deadline was pushed back a little bit again this year because of the Emancipation Day holiday in the District of Columbia. This year’s tax deadline is Monday, April 18, 2022. That goes for your state tax return as well, and your local tax return.  

Unemployment Compensation 

The IRS says there’s some confusion this year on whether unemployment benefits should be included on 2021 tax returns as income. GJM tax experts say any unemployment compensation you received in 2021 is considered income and should be included on your 2021 tax return. The reason for the confusion is that there was a special law that you didn’t have to include unemployment payments on your 2020 tax return. That special law was just for one year and only applied to 2020 tax returns. It isn’t the case anymore, so be sure to include any unemployment benefits as income on your 2021 tax return.

COVID-Related Tax Breaks 

Make sure you include any COVID-related tax breaks you got in 2021: Advance Child Tax Credit payments and that third Economic Impact Payment. The IRS says it is seeing some taxpayers claim the wrong amounts on their 2021 tax returns. Make sure you reference the IRS letters you received regarding these payments: IRS Letter 6419 for the Advance Child Tax Credit payments and IRS Letter 6475 for your third Economic Impact Payment. That way you will be sure to get the correct amounts on your return.

Charitable Donations 

You can claim a deduction up to $300 for cash contributions to qualifying charitable organizations, even if you claim the standard deduction on your 2021 tax return. Married couples filing joint tax returns can claim up to $600.

Virtual Currency

Be sure to check either yes or no in the box on your 1040 Form that asks about virtual currency. The IRS says some people are forgetting to do so.

Set Up a Payment Plan

Failing to file your tax return because you know you owe and don’t have the money to pay is a big no no. It could cost you a great deal in penalties. If you owe money you need to pay by the April 18 deadline or set up a payment plan.

File Electronically

The IRS says a good way to cut down on mistakes is to file your tax return electronically and do direct deposit to your bank account. Electronic platforms require you to fill out all the necessary fields and that could help you avoid making a simple mistake, like forgetting your SSN.

Avoid Common Mistakes

Often people’s tax returns get held up, red flagged or delayed because of simple errors, according to the IRS. Be sure to review all your information for accuracy and doublecheck your final steps before hitting “submit” or mailing your tax return.

Here are some other important steps to avoid simple mistakes:

  • Make sure you use correct filing status
  • Report all your taxable income
  • Doublecheck your name, birth date and Social Security Number
  • Doublecheck your routing and bank account numbers
  • Sign and date your tax return
  • Keep a copy of your tax return
  • If mailing a paper tax return, make sure you mail it to the right address and have the correct postage on it
  • Take a deep breath and don’t rush. As a last-minute filer, if you hurry through filling out your return, you’re increasing your chances of making a simple mistake

Can’t get your return done in time? File for an extension. That gives you six more months to file, with the extended deadline for individuals on October 17, 2022. If you need some help, you’ll find all kinds of helpful tools from the IRS, including how to track your refund once you’ve filed.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business & transaction advisory, healthcare management advisory, outsourced accounting, and risk advisory. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution, nonprofit, private equity and utilities.  

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