IRS offers tips for people who haven’t filed their 2021 tax return; encourages taxpayers to file soon

FS-2022-35, August 2022

 

Many people haven’t yet filed their 2021 tax return, with an estimated 19 million taxpayers requesting an extension to file until October 17. Others haven’t yet filed because they need help, can’t find their records or are unsure about whether they need to file. The IRS urges people to file electronically sooner rather than later and provides resources to get the answers needed to file an accurate return.

 

Here are some common reasons people haven’t yet filed their 2021 tax return and where to find more information

They missed the April deadline and didn’t request an extension
If someone hasn’t yet filed their 2021 tax return or requested an extension to file, they shouldn’t let that stop them from filing, especially if they owe money. Filing electronically as soon as possible can help people who didn’t file an extension avoid further penalties and interest if they owe taxes. There’s no penalty for not filing a return if a refund is due, but if no return is filed, there’s no time limit for assessing and collecting taxes, penalties, and interest if any are owed.

They owe taxes and can’t pay
If an individual owes taxes, they should electronically file their tax return now to avoid further penalties and interest that accrue for not filing by the deadline. If they can’t pay the full amount of their taxes, they should pay what they can now to reduce the amount of penalties and interest that will continue to accrue, and review the options for people who can’t pay their taxes, including applying for a payment plan on IRS.gov.

Anyone who owes taxes can review all payment options online. These include visiting IRS.gov to access their Online Account and paying with IRS Direct Pay or with a debit card, credit card or digital wallet.

Their 2020 tax return hasn’t been processed yet
Some people haven’t filed a 2021 tax return because they’re still waiting on their 2020 tax return to be processed. But there’s no need to wait. To validate and successfully submit an electronically filed tax return to the IRS, taxpayers need their Adjusted Gross Income, or AGI, from their most recent tax return. Those waiting for their 2020 tax return to be processed can still file their 2021 return electronically by entering $0 for their 2020 AGI when prompted. Remember, if using the same tax preparation software as last year, this field will usually auto-populate. Everyone else should enter their prior-year’s AGI from their 2020 tax return.

They don’t owe any taxes, so they believe they don’t need to file
Some may think that because they don’t owe tax, they don’t need to file a return. Owing tax and having a filing requirement are two separate situations. If someone isn’t sure whether they’re required to file, they can use the IRS’s Interactive Tax Assistant Do I Need to File a Tax Return? to help figure it out.

 

Some people may choose not to file a tax return because they didn’t earn enough money to be required to file. But they may miss out on receiving a refund. This could apply if someone had federal income tax withheld from their pay, made estimated tax payments, or qualifies to claim tax credits such as the Earned Income Tax Credit. The only way to get a refund is to file a tax return. Generally, there’s no penalty for filing after the April 18 deadline if a refund is due.

 

Also, people still have time to get their full Child Tax Credit or claim a Recovery Rebate Credit if they didn’t get the full amount of their third stimulus payment, but they need to file a 2021 tax return to receive them. If someone still needs to file a 2021 tax return, they should file electronically and, if they’re due a refund, choose direct deposit.

They can’t find the records they need
IRS Online Account can provide access to many tax records needed to file a tax return. In Online Account, people can view, access and print:

• key data from their most recently filed tax return, including their adjusted gross income, as well as transcripts
• information about their Economic Impact Payments, including the amounts of payments they received
• information about their advance Child Tax Credit payments
• digital copies of certain notices from the IRS

 

For records specifically related to:

Economic Impact Payments/Recovery Rebate Credit – Individuals who didn’t qualify for a third Economic Impact Payment or got less than the full amount may be eligible to claim the 2021 Recovery Rebate Credit and will need to file a 2021 tax return even if they don’t usually file a return.

Anyone eligible to claim the 2021 Recovery Rebate Credit needs to know their third Economic Impact Payment amount, including any plus-up payments, to correctly calculate the credit. Spouses filing a joint return for 2021 need to know the payment amounts for both spouses to claim the credit.

Individuals can find the amount of their third Economic Impact Payment in IRS Online Account or in Letter 6475, Your 2021 Economic Impact Payment(s).

For married individuals filing a joint return, each spouse will need to log into their own Online Account or review their own Letter 6475 for their portion of their joint total payment. See FAQs for Topic G: Finding the Third Economic Impact Payment Amount to Calculate the 2021 Recovery Rebate Credit, for more information.

 

For records related to:

Advance Child Tax Credit payments – If someone received advance payments of the Child Tax Credit, they need to reconcile (compare) the total they received with the amount they’re eligible to claim. To reconcile advance payments on their 2021 return, people will need their advance payments total and the number of their qualifying children, which can both be accessed on IRS Online Account. People can also refer to their Letter 6419 for the information they’ll need.

For records related to:

Earned Income Tax Credit – Taxpayers who did not file a return for tax year 2021 because they had no earned income last year may file to claim the credit using their 2019 earned income if they are otherwise eligible for the EITC. Taxpayers can use their 2019 earned income to figure their 2021 Earned Income Credit only if their 2019 earned income is more than their earned income for the tax year for which they are figuring the credit. An individual’s 2019 account transcript can be accessed through IRS Online Account or requested online using Get Transcript. People can use the EITC Assistant to see if they’re eligible for this valuable credit, calculate how much money they may qualify for and find answers to questions.

They need help preparing their tax return
Taxpayers are encouraged to use electronic filing options to prepare and file 2021 tax returns electronically, including IRS Free File, which is available on IRS.gov through October 17 to those who earned $73,000 or less in 2021. Those that earned more have the option to use IRS Free File Fillable Forms.

The IRS offers tips to help taxpayers Choose a Tax Professional to assist in tax return preparation. And the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help taxpayers find tax return preparers who hold a professional credential recognized by the IRS or who have completed IRS requirements for the Annual Filing Season Program.

The IRS’s Volunteer Income Tax Assistance (VITA) program offers free basic tax return preparation to people who generally make $58,000 or less and people with disabilities or limited English-speaking taxpayers. While the majority of these sites are only open through the end of the filing season, taxpayers can use the VITA Site Locator tool to see if there’s a community-based site staffed by IRS-trained and certified volunteers still open near them.

They think they have plenty of time until the October 17 deadline
Taxpayers can file electronically at any time before the October deadline and avoid a last-minute rush to file. If people have the records they need to file, they should file as soon as possible to avoid delays in processing their return. If a taxpayer requested an extension to file, they have until October 17, 2022.

The IRS encourages taxpayers to file electronically through a tax professional, IRS Free File, Free Tax Preparation site or commercial tax preparation software.