As the 2021 tax filing season approaches, it’s crucial to stay informed about the latest tax laws and regulations to ensure an accurate and timely filing. This comprehensive guide will provide you with all the essential information you need to know about filing your 2021 taxes, including important deadlines, deductions, and credits.
Key Considerations Before Filing
Gather Necessary Documents:
Before you begin the filing process, gather all the necessary documents, including:
- W-2 forms from employers
- 1099 forms from banks, investment firms, and other sources of income
- Records of any deductions or credits you plan to claim
Review Tax Law Changes:
Stay informed about any tax law changes that may impact your return. The Tax Cuts and Jobs Act of 2017 brought significant changes to the tax code, so it’s important to understand how these changes affect your filing.
Estimate Your Tax Liability:
Use the IRS Tax Withholding Estimator to estimate your tax liability and avoid any surprises or penalties. This tool helps you determine if you need to adjust your withholding for the current year or make estimated tax payments.
Important Deadlines
- April 18, 2023: Tax filing deadline for most individuals (extended from April 15 due to Emancipation Day holiday in Washington, D.C.)
- October 17, 2023: Tax filing deadline for individuals who file an extension
Filing Options
Electronic Filing:
E-filing is the fastest, most accurate, and secure way to file your taxes. You can use tax software, an online tax preparation service, or the IRS Free File program to e-file your return.
Paper Filing:
You can still file your taxes by mail using Form 1040. However, paper filing is more prone to errors and may take longer to process.
Deductions and Credits
Standard Deduction:
The standard deduction is a specific amount you can deduct from your taxable income before calculating your taxes. The standard deduction varies depending on your filing status.
Itemized Deductions:
If your itemized deductions exceed the standard deduction, you can choose to itemize your deductions. Common itemized deductions include mortgage interest, charitable contributions, and medical expenses.
Credits:
Tax credits directly reduce your tax liability. Some common credits include the Earned Income Tax Credit (EITC), the Child Tax Credit, and the American Opportunity Tax Credit.
Free Tax Help
IRS Free File:
The IRS Free File program offers free tax preparation and e-filing services to eligible taxpayers. If your income is $73,000 or less, you can use one of the IRS Free File partners to prepare and file your taxes online for free.
Volunteer Income Tax Assistance (VITA):
VITA provides free tax preparation assistance to low- and moderate-income taxpayers. VITA volunteers are trained to help you prepare your taxes accurately and claim all eligible credits and deductions.
Additional Resources
What You Need To Know About Your 2021 Taxes
What if I file a 2021 tax return?
By filing a tax return, individuals could claim: The Recovery Rebate Credit to receive any remaining 2021 stimulus payments that they might not have received (for example, if they added a new child or other dependent in 2021);
When do you have to pay taxes in 2021?
If you file for an extension, you’ll have until October 15, 2021 to file your taxes. But, you’ll still need to pay any taxes you owe by May 17. The new federal tax filing deadline doesn’t apply to 2021 estimated tax payments. First and second quarter estimated tax payment deadlines are still April 15, 2021 and June 15, 2021.
What is the tax deadline for 2021 & 2021?
Due to severe winter storms, the IRS has also extended the tax deadline for residents of Texas, Oklahoma and Louisiana to June 15, 2021. This extension also applies to 2020 tax payments. Individual taxpayers may defer tax payments until the new filing deadline, interest and penalty free.
How much AGI should I enter on MY 2021 tax return?
For those waiting on their 2020 tax return to be processed, enter $0 for last year’s AGI on the 2021 tax return. Those who used a non-filer tool in 2021 to register for an advance child tax credit or third Economic Impact Payment in 2021, should enter $1 as their prior year AGI.