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Posted by: Myrick CPA Posted on: Mar 24 2022 Posted in: tax refund

Why You Should File Electronically As Soon As Possible

COVID-19 and the resulting shutdown in 2020 disrupted nearly everything in our society and almost every business and institution. Many are still dealing with the repercussions, whether involving supply chain issues or employee shortages. One of those institutions greatly impacted by the pandemic is the IRS.

What’s The Holdup?

Various circumstances converged to create the current backlog of 8.1 million unprocessed returns (as of February 18, 2022).

  • In March 2020, the IRS closed all its processing and service facilities for several weeks, just before the traditional April 15 tax filing deadline.
  • When they re-opened after the shutdown, it was in a limited capacity out of concern for the health of taxpayers and employees.
  •  When offices re-opened, there was a mountain of mail to open. Not only tax returns filed but other regular taxpayer correspondence. 
  • According to its website, as of February 25, 2022, “Individual refund returns received prior to April 2021 have been processed if the return had no errors or did not require further review.”
  • That indicates:
    • A ten-month backlog of returns filed any time after April 2021,
    • Returns where taxes were owed and submitted prior to April 2021, may not yet have been processed and
    • Refund returns more than 10 months old, if they contained errors, may still not have been reviewed.
  • By their very nature, paper returns take longer for the IRS to receive and process. As a result, the term “Snail Mail” has become even more apt in the past couple of years.

What can be done?

The IRS is working diligently to cut the backlog of returns, but it will still take some time. They have begun the process of changing from a paper-based process to a more digital process. For example, they may accept emailed documents now instead of requiring snail-mailed originals. It is also expanding its self-help options to reduce time and frustration for taxpayers. The biggest time saver, though, has been to encourage all taxpayers to electronically file, businesses and individuals alike.

Whether you have taxes for years prior to 2021 to file, or need to file your current taxes, you still have a few filing options. In general, it is best to avoid large tax refunds, but the quickest way to see your refund is to file electronically as soon as possible and request your refund direct deposited into your bank account. The IRS’s website says that it generally takes three weeks or more to issue most refunds after receiving your return.

Clearly, e-filing is an effective way to receive your refund as much as a week sooner than if your return is snail-mailed.

Filing taxes can be intimidating to many people. It can be a complicated and confusing process with all the forms, worksheets and rules to follow. The tax specialists at Myrick CPA offer a full spectrum of services, from tax planning to preparation, to maximize your cash flow and minimize your tax liability. Contact us today to arrange an appointment to discuss your needs and circumstances.