IRS Woes: Expert Identifies ‘Biggest, Most Persistent Problem’ for Taxpayers

This season, it’s important to file a complete and accurate return to prevent any delays in receiving your tax refunds. Make sure to collect your tax forms, like W-2s and 1099s, from your employers and financial institutions annually. 

These forms are submitted to the IRS as “information returns.” The IRS’s software for matching is a major concern for taxpayers, as it has the ability to quickly identify missing forms. Errors will necessitate you to submit a revised return, further impeding the system.

Even if you file the updated return electronically, it will often be subject to manual processing, which can result in delays that may continue for many months. Due to the fact that the procedure is manual and labor-intensive, it is quite important to make sure that the tax return is right the very first time. It is imperative that you have all of your tax paperwork prepared. 

The W-2 form is used for wages, the 1099-NEC form is used for work performed under contract or in the gig economy, the 1099-G form is used for income from unemployment, and the 1099-R form is used for payouts from retirement plans. 

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Maximize Tax Advantages

This season, it’s important to file a complete and accurate return to prevent any delays in receiving your tax refunds.

It is probable that you may require forms 1098 for mortgage interest, 5498 for deposits into individual retirement accounts, 5498-SA for contributions to health savings accounts, 1098-T for tuition, and 1098-E for interest on student loans in order to qualify for any tax advantages. 

Due to the fact that your employer or financial institution will need to reissue the papers, the processing time for corrected tax forms may be longer.

Reviewing the return from the previous year and taking into consideration factors such as employers, income from banking institutions, and other comparable tax benefits is an effective way to get organized. 

Consider what occurred in your life over the course of the previous year, including the locations you worked or the products you sold, if this is your first time filing a tax return or if things have changed.

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