Filing Federal Tax Return In 2021 Is A Bit More Complicated This Year, But There Are Ways To Speed Up Your Tax Refund
PITTSBURGH (KDKA) -- January 26 is the first day to file your federal tax return, and most Americans will be getting a refund.
Last year, 167 million tax returns were filed in the United States, and most of those taxpayers – 122 million – got a refund. How soon you get that refund, say the experts, depends on how you file that original return.
"Do what you can absolutely to e-file and choose direct deposit. Paper is not necessarily IRS' friend. It hasn't been during the pandemic," Raphael Tulino, a spokesperson for the IRS, told KDKA money editor Jon Delano.
In fact, says Tulino, some who filed by paper last year are still waiting for their return to be processed. So if you file electronically and direct deposit to your bank account, how long is the wait?
"The normal timing – we're still trying to stick by this – 21 days or less for most, assuming a paperless tax return," Tulino said. "Now that's not to say if there's an error that might slow it down."
Here's another tip for a quick refund. Because of tax law changes, recognize this return is a little more complicated for some people.
"Certainly, there's a little bit more to navigate this year," Tulino said.
President Joe Biden's American Rescue Plan pumped a $1,400 stimulus check into most hands, and the advanced child tax credit last year requires many parents of dependent children to file additional information to get the remaining credit.
WATCH: Jon Delano reports
"Be sure, sure, sure to file an accurate return the first time. Millions and millions of people will be reconciling the third economic impact payment on their tax return, aka stimulus, on the recovery rebate credit line and also advanced child tax credits," says Tulino.
The IRS says whether you e-file in late January or early April does not affect its three-week goal of getting a refund back to you, but tip three, don't file before you're ready.
"The IRS would like people, taxpayers, you, and everybody else to file when you're ready, when you have all your paperwork and you're confident that all that information on your return is going to be accurate and honest the first time," Tulino said.
Double-check the numbers you type in and do the math. Little mistakes will delay your refund, and filing your 2021 tax return may not be as simple as last year, says Mark Steber, chief tax information officer with Jackson Hewitt, a tax preparation service.
Delano: Is there anything new and different about the 2021 tax year that taxpayers should be aware of?
Steber: There's a great deal different in 2021, and it's kind of the culmination of three years of the pandemic.
Steber says taxpayers should first focus on three tax credits – the child tax credit – the earned income tax credit – and the dependent care tax credit. Each is refundable, meaning you get money back if the credit exceeds your taxes owed.
"Those three credits alone are enough to be paying attention to your taxes," Steber said.,
And then – even if you don't itemize and most taxpayers do not – this year, and only this year, you get to deduct some donations to charities.
"For 2021, you can take both the standard deduction, which most Americans do, plus a limited charitable donation if you made charitable donations in 2021 -- $300 if you're single, $600 if you're married filing jointly. Don't look past the new perk – charitable donations even if you don't itemize," says Steber.
Steber also says there are lots to watch for this year, depending on your personal situation during this pandemic.
"If you're self-employed, a whole host of benefits, the least of which is the home office deduction," Steber said. "It's not new but it's often misunderstood, not looked at. There's issues related to virtual currency and cryptocurrency. There's a lot of other benefits if you've got higher education credits. And then, of course, there's a whole slew of state benefits that states have piggybacked on to the federal."
Stber recommends using one of those online tax filing services for help. The IRS has a free online tax service for those who make under $73,000, and all taxpayers should file electronically and either get advice from a professional or take the time to do it right.
"Your tax return is your single largest financial transaction each and every year. It hasn't gotten simpler in 2021, but it has gotten a lot more fair," says Steber.
Last year, the average refund was just under $2,800, up 11 percent from the year before. The IRS says if you file electronically with direct deposit to a bank, you should get your refund this year in 21 days.