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Thursday July 7, 2022

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IRS Tax Tips on Credits and Payments

As tax filing continues in high gear, the Internal Revenue Service (IRS) has published tax tips in IR–2022–62. The IRS regularly sees a number of common errors on tax returns. Many of these lead to an incorrect calculation of the Recovery Rebate Credit or Child Tax Credit.

Taxpayers should refer to IRS Letter 6419 to calculate their advance Child Tax Credit payments or IRS Letter 6475 for your third Economic Impact Payment. If you report the incorrect amounts, this could possibly delay your refund.

The IRS also offers many tax tips for proper filing this season.
  1. File Electronically — You will reduce mistakes by using tax software or the IRS Free File program to file electronically. The software checks your return and will find most potential mistakes. Even if you use tax software, you should always review your tax return for accuracy.
  2. Correct Filing Status — Your tax software will also check your filing status. If you have questions, the Interactive Tax Assistant on IRS.gov may be helpful.
  3. Virtual Currency — Your IRS Form 1040, asks whether you have received, sold, exchanged, or otherwise disposed of virtual currency. Do not leave this field blank, make sure to check either "Yes" or "No."
  4. Report Taxable Income — All income of any type and from any source must be reported. The most common income reporting documents are IRS Forms W–2, 1099–MISC or 1099–NEC.
  5. Unemployment Compensation — While there was an unemployment compensation exclusion for tax year 2020, the payments received in 2021 are generally taxable. They should be reported as income on your return.
  6. Name, Birth Date and Social Security Number — Taxpayers must list the correct name, Social Security Number and date of birth for each dependent. The information should be exactly the same as printed on the individuals' Social Security Card. If a dependent does not have a Social Security Number, the Individual Tax Identification Number (ITIN) may be listed.
  7. Bank Routing and Account Numbers — Taxpayers who desire a rapid refund should direct it to their bank account. You should be careful to double check your bank routing and account numbers. If the number is incorrect, your refund will be deposited in another individual's account or the bank may reject the deposit.
  8. Paper Tax Returns — Taxpayers who file a paper return should carefully select the correct mailing address. The IRS reminds taxpayers that a refund from your paper income tax return may be delayed for "much longer than usual" and are therefore encouraged to filed taxes electronically.
  9. Sign and Date — All tax returns must be signed and dated by the taxpayer. A joint return must be signed and dated by both spouses. If you file electronically, there are special instructions that qualify as signing.
  10. Retain a Copy — Taxpayers should always make a copy of their return and the tax schedules. These may be helpful if you are purchasing a home and seeking a loan.
  11. Tax Extension — Taxpayers who cannot file by the April 18 deadline may use Free File or IRS Form 4868 to request a six-month filing extension to October 17, 2022. Even if you extend your filing date, the tax is due on April 18 for most taxpayers.

Published March 25, 2022

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Joel Osteen Ministries
Shawna Collins
Director of Planned Giving
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Houston, TX 77027
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