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An error-free return may avoid delays, and IRS transcripts can help, tax experts say.
While most who file electronically and use direct deposit will see refunds issued within 21 days, mistakes can halt the process by flagging your return for a manual review.
There was a flood of roughly 9 million “math error” notices from the IRS from Jan. 1 through July 15, 2021, with 7.4 million caused by stimulus payment mistakes.
What’s worse, there were fewer than 15,000 workers to handle the 240 million incoming calls during the first half of 2021, which is one person for every 16,000 calls.
“You want to make sure that your returns are right,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. “Because it’s going to be really difficult to get a hold of anyone [at the IRS] to talk through your situation.”
One way to cut back on mistakes is for your return to match IRS records, such as advance child tax credits, stimulus payments and any tax form submitted on your behalf — income, unemployment, Social Security benefits, mortgage interest and more.
These forms can easily get lost if you’ve moved, and many companies no longer deliver them by mail, explained Or Pikary, a CPA and tax advisor at Mazars, a tax advisory firm in Los Angeles.
However, if you’re missing documents, you can get a free IRS transcript. There are five types of transcripts, covering past returns, account summaries, income details and more.
While the fastest way is online, you may also request one by phone or mail.
How to access IRS transcripts online
1. You must register or login to your IRS Online Account.
2. After signing in, click “Get Transcript Online” here.
3. Pick a reason from the drop-down menu.
4. Select your IRS transcript by year and download .pdf.
“Most people don’t know about the wage and income transcript,” said Lucas.
And it may be particularly helpful if you’re a gig worker or independent contractor with dozens of jobs, tracking down multiple 1099-NEC forms to verify your income, he said.
However, the wage and income transcript also includes other records, such as health savings account details, that may not be complete until July, according to the IRS.
The transcript may also be helpful if you refinanced your mortgage last year and have interest statements from more than one company, Pikary said.
“That could be a deduction that you’re missing,” he warned.
Moreover, IRS transcripts are another way to check for fraudulent activity, Pikary said, and the sooner you notice, the faster you can report the problem.
While IRS transcripts can be helpful, these reports may be difficult to read since the agency uses three-digit transaction codes with a brief description to identify each entry.
However, you can use the Transaction Codes Pocket Guide to check any line items that may be unclear. And if you’re still not sure, you can review your transcript with a tax professional.
“You definitely don’t want to be guessing this year,” Lucas added.
Source : CNBC