Do you have questions about tax season for 2022? Are you wondering how to file your tax return or whether you’re eligible for a refund? You are not alone! Filing your taxes can sometimes feel confusing – especially with all the fiscal changes that have taken place since the pandemic.
The SABEResPODER team has put this guide together to provide you with all the information you’ll need for filing your taxes in 2022 and bring you peace of mind (and hopefully a big tax return!)
When will the tax season begin in 2022?
In a recent press release, the Internal Revenue Service (IRS) announced that they would start accepting tax returns as of January 24, 2022. If you plan to file taxes this season, it’s important to become familiar with the United States tax system. This will allow you to submit your return properly and in a timely manner.
How taxes work in the U.S.
Taxes in the United States are based on a sliding scale according to your income levels. Depending on your source of income, you can deduct expenses that are related to these earnings. This allows you to calculate your Adjusted Gross Income (AGI), which is the amount used to determine your individual tax bracket.
The return that you submit in 2022 corresponds to income received during the 2021 tax year. You must file a return if you:
- Received income of or above the minimum amounts established by the IRS, or
- Received taxable retirement income
The US Government website states that filing your taxes involves the following steps:
- Gather the necessary documents for your return. The most common tax forms include W-2s, 1099s, donation receipts, medical expenses, and business costs. Your employer may hand you some of these documents in person, provide them electronically, or send you a hard copy by mail.
- Determine your filing status. This is important because it affects your tax rate and your eligibility for certain types of deductions.
- Decide if you want to submit your return online or by mail.
- Choose between itemized deductions or standard deductions. This will depend on the complexity of your return and the amount of eligible deductions that you are able to file.
There are several ways to complete and send your tax return to the IRS. These are:
- By completing the IRS forms by hand and sending hard copies via regular or certified mail.
- Using one of the many online services that are available for taxpayers to process their returns electronically. Some of the most popular online services include Turbotax, H&R Block and TaxSlayer.
- Taking advantage of the IRS Free File system. It’s available at no cost to taxpayers with an AGI of $73,000 or less.
- By hiring the help of a professional.
Keep in mind: If you overpaid taxes during the year and are eligible for a refund, you need to select your preferred delivery method when you submit your tax return documents. We recommend using a PODERcard bank account for your tax refund - it features no monthly fees or minimums. If you owe the IRS money after filing your return, you can look into the different payment methods available and learn more about the payment plans that the IRS offers.
The IRS calendar for 2022
As mentioned above, the IRS started accepting 2021 tax returns on January 24, 2022. The deadline to submit your taxes or request an extension is April 18, 2022 at 11:59pm.
In other words, tax season runs from January 24 to April 18, 2022. And this means that you need to file your taxes within that time window to avoid penalties.
To help you file your return before the deadline, the IRS published a tax calendar with all the important fiscal dates. This will allow you to plan accordingly and submit your documents on time.
When is it my turn?
Most taxpayers are expected to submit their returns within the time period specified by the IRS. This period is known as tax season.
An exception to this rule is if you own a business with a fiscal year that does not end in the month of December. In this case, the IRS indicates that you’ll have to file your taxes on the 15th day of the fourth month following the closure of your fiscal calendar.
Tax return dates for 2022
If you’re eligible to receive a tax refund, the IRS can send you a check by mail or they can deposit the funds directly into your bank account. How quickly you receive this payment depends on the date when you file your tax return and how you submit them. Generally, this process takes up to three weeks.
How do I get my refund sooner?
To get your refund as quickly as possible, the IRS recommends that you use their direct deposit program. With this safe and reliable method, the IRS can deposit your refund electronically at no additional cost to you. You can use the same bank account to receive refunds for up to three different tax returns.
If you’d like to receive your money via direct deposit, you’ll need to select it as your preferred refund method when you file your tax return. Direct deposit is available whether you submit your return online, through a tax expert, or by mail. In order to receive your refund electronically, you just need to provide the IRS with your bank account number and routing information.Keep in mind: Sending your tax return electronically and requesting direct deposit is the quickest way for you to receive your refund.
How long will the 2022 tax refund take?
The IRS Frequently Asked Questions page states that most taxpayers can expect to receive their refund within 21 days of filing their return. But, due to the pandemic, their website also warns that there may be delays in processing this year’s tax refunds.
If you file your tax returns online, you can also track the status of your refund check using the IRS website Where’s My Refund?. To search for your refund, you will need to provide the following information:
- Your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
- Your filing status
- The exact amount of your refund, according to your tax return
Keep in mind: You’ll need to wait 24 hours after filing your return online or 4 weeks after sending it by mail in order to track your return. You can also use the IRS official app IRS2Go to stay on top of your refund status.
What happens if you can’t file your return before April 18th?
Sometimes, taxpayers need an extension to file their returns after the deadline. If you’d like to request an extension from the IRS, you can submit form 4868 and send it to the address provided on this form. You can also use the IRS interactive forms website to send your request electronically.
With this extension, the IRS provides another six months for you to complete your 2021 tax return. This means that, if approved, your new deadline will be October 15, 2022.
It’s important to point out that this extension only allows you to file your return at a later date. It is not an extension for you to pay any taxes owed. If you’re expecting to owe money to the IRS or to your state, you’ll need to send a payment as soon as possible to avoid incurring fees and interest.
You can also receive an automatic extension when you use Direct Pay, the Electronic Federal Tax Payment System or when you process credit or debit card payments. All you have to do to receive the extension is choose “Form 4868” as your type of payment.
If you cannot pay off your amount due, the IRS may be able to help. With payment options that offer different terms and other helpful programs, you can agree on a plan to liquidate your tax debt.
Some of the payment plan options that are available include:
- Short term payment plans: They offer up to 120 days for you to pay off tax debt below $100,000, including interest and penalties.
- Long term payment plans: If you owe less than $50,000, you can qualify for a plan that splits up your payments in a time period that’s longer than 120 days.
The available payment methods include:
- Direct debit from your bank account.
- Payroll deductions.
- Internet payments.
- Check or money order.
- Cash payments at IRS retail partner locations.
Keep in mind: The IRS requires that you have your tax returns up to date in order to approve a payment plan application. When submitting your request, you’ll need to propose a monthly payment date and an amount that is affordable to you. Usually, the IRS responds to these requests within 30 days.
Penalties for not paying your taxes in 2022
If you fail to file your return by the deadline, the IRS will charge you a penalty. This fee is calculated as follows:
- 5% of your unpaid taxes for each month after the deadline or part thereof, up to 25% of the amount due.
- If your return is more than 60 days late, you will receive a minimum fine of $435 or 100% of the tax payment that is due on your return (whichever amount of the two is lowest).
- If your return is more than five months late, the penalty can reach the maximum allowed by law, which is up to 25% of the amount due.
It’s important to point out that the IRS will also charge interest on any penalties imposed. These interest charges vary depending on the type of penalties that you incur. However, the interests on penalties and your outstanding balance can add up very quickly. If you are unable to pay off your tax debt, it’s best to contact the IRS and set up a payment plan as soon as possible.
If there is a reasonable cause that kept you from filing your return or paying your taxes on time, you may be eligible for a penalty reduction. According to the IRS, some reasonable causes for missed payments or late tax returns could be:
- Serious illness
- Natural disasters (such as fires, hurricanes, etc…)
To prove your case and request a reduction or forgiveness of your penalties, you’ll need to provide the IRS with proper documentation. Examples of these documents include:
- Hospital files
- Court documents
- Medical notes
- Proof of natural disaster
Keep in mind: Although lack of funds is not considered a reasonable cause, the source of financial burden could help you qualify for a reduction in your penalties. If you wish to explain your situation to the IRS, reach out to them as soon as possible. By calling the number on your notification letter, you’ll be able to speak with a representative and see if your situation qualifies as reasonable cause.
File your taxes with confidence
We hope that this article helps you become more familiar with the United States tax system so that you can prepare for the 2022 tax season. With your financial documents in order, good records of your deductible expenses, and the help of a professional, you can file your tax return with confidence this year and take control of your personal finance.