MEDIA ALERT – With the 2022 tax filing season starting next week, taxpayers need to be aware of new complexities

Rhea-AI Summary

Wolters Kluwer Tax & Accounting outlines crucial taxpayer considerations as the IRS prepares for the 2022 tax season starting January 24, 2022. Taxpayers face a three-day delay in the filing deadline, which is now April 18, 2022. The IRS warns of potential difficulties due to a larger backlog from 2021, slower processing times, and delayed refunds. Moreover, changes in tax credits and deductions, including the Child Tax Credit and Earned Income Tax Credit, may further complicate filings. Experts recommend early electronic filing to mitigate issues.

Positive

• IRS accepting and processing 2021 tax returns earlier than last season.
• Enhanced tax credits available for more taxpayers, including Child Tax Credit.
• Increased business meal deduction from 50% to 100% for meals at restaurants.

Negative

• IRS starts tax season with a significantly larger backlog from 2021.
• Processing of tax returns may take longer than usual requiring more manual intervention.
• Potential delays in tax refunds and poor connectivity in helplines may affect taxpayer experience.

Wolters Kluwer Tax & Accounting examines taxpayer considerations ahead of the upcoming tax season start date

Wolters Kluwer Tax & Accounting:

What: The Internal Revenue Service (IRS) announced that it will start accepting and processing 2021 tax returns on January 24, 2022, well ahead of the February 12, 2021 date for the last filing season. The filing deadline for individual tax returns will be April 18, 2022, a three-day delay from the usual filing deadline due to weekends and holidays. However, despite the return to a relatively normal filing period, the IRS also warns of significant potential difficulties with the filing season. The IRS encouraged taxpayers to file as soon as possible and to file electronically to help minimize the effects of potential tax season problems.

Why: Factors such as COVID, COVID-related tax legislation, and lack of adequate IRS funding have been mentioned by the IRS as potentially creating problems for the 2022 tax filing season. The following are some of the possible issues affecting taxpayers and tax professionals.

• The IRS starts the tax season with a much larger than usual backlog from the 2021 tax filing season
• The IRS warns that processing of 2021 tax returns may take longer than normal due to greater need for manual processing of some tax returns
• The IRS warns that tax refunds may be delayed
• The IRS warns that telephone helplines may continue to provide poor connectivity
• The 2021 tax return will be complicated by a larger and fully refundable Child Tax Credit and the need to track and account for advance payments in 2021
• Taxpayers will once again have to track Economic Impact Payments in the calculation of the Recovery Rebate Credit and distinguish payments in early 2021 from those in the third round later in the year
• More taxpayers will likely be eligible for the enhanced Earned Income Tax Credit on 2021 tax returns
• More middle-income taxpayers will be eligible for the enhanced and fully refundable Child and Dependent Care Credit on 2021 tax returns, although some higher income taxpayers may no longer be eligible
• More taxpayers will be eligible for the enhanced Premium Tax Credit for health insurance obtained under the Affordable Care Act
• Enhanced charitable contribution deductions will again be available on 2021 tax returns with some modifications for non-itemizers
• The business meals deduction will increase from 50 percent to 100 percent for meals and beverages provided by a restaurant
• Business tax returns will have to deal with modifications to the various COVID-related payroll tax credits and tax deferrals
• COVID-related business tax breaks for Net Operating Loss carry backs and the business interest expense limitation expired at the end of 2020
• Several individual and business regularly expiring provisions expired at the end of 2021

Wolters Kluwer Tax Briefing: Wolters Kluwer Tax & Accounting recently published the 2021 Tax Year-In‑Review expert briefing that highlights tax code changes made in 2021 and provides a look ahead for 2022 and beyond.

Who: Federal tax expert Mark Luscombe, JD, LL.M, CPA, Principal Federal Tax Analyst at Wolters Kluwer Tax & Accounting, is available to discuss issues around the start of tax filing season.

PLEASE NOTE: The content of this article is designed to provide accurate and authoritative information in regard to the subject matter covered. The information is provided with the understanding that Wolters Kluwer Tax & Accounting is not engaged in rendering legal, accounting, or other professional services.

Contact: To arrange interviews with Mark Luscombe and other federal and state tax experts from Wolters Kluwer Tax & Accounting on this or any other tax-related topic, please contact Bart Lipinski.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220120005255/en/

BART LIPINSKI

847-267-2225

Bart.Lipinski@wolterskluwer.com

Source: Wolters Kluwer Tax & Accounting

FAQ

When does the IRS start accepting 2021 tax returns?

The IRS will start accepting 2021 tax returns on January 24, 2022.

What is the filing deadline for 2021 tax returns?

The filing deadline for individual tax returns is April 18, 2022.

What issues might taxpayers face during the 2022 tax season?

Taxpayers may encounter delays due to a larger backlog, slower processing times, and difficulties with IRS helplines.

What enhancements are available for the Child Tax Credit in 2021?

The Child Tax Credit is larger and fully refundable, benefiting more taxpayers.

Are there any changes to business meal deductions for 2021?

Yes, the business meals deduction increases from 50% to 100% for meals provided by restaurants.