Getting Ahead on Your 2021 Federal Income Tax Return

Americans are continuing to recover from the financial impact of the pandemic. The government has extended certain forms of relief, businesses are getting back up and running, but the return to work looks different than it did just two years ago.

The more prepared you are for your tax situation, the easier it will be to file. Here is a look at what you can do to get ahead and be ready to file your taxes. 

1. Gather your documents and tax forms 

To save time when you file, begin organizing your tax documents and records as you receive them. The type of information you’ll need includes earnings and investment statements, unreimbursed medical expenses, loan statements, and homeownership records. 

If you received an Economic Impact Payment (stimulus check), you might need Notice 1444, Your Economic Impact Payment, to calculate any Recovery Rebate Credit. If you’ve received unemployment compensation in 2021, that income will be reported on Form 1099-G.  

If you received advance Child Tax Credit payments (checks disbursed to you) in 2021, the IRS will send you Letter 6419 sometime in January. This document will help you report those payments on your return.

For a detailed list of documents you may need, see our Tax Prep Checklist

When will I get my tax forms?

The IRS requires that most tax forms be postmarked by January 31st, so you should expect to see your W-2, 1099, and other records by early February at the latest. Can’t find the documents you need? Here’s what you can do. 

2. Review tax law changes 

For 2021 tax returns (filed in 2022), you can deduct charitable cash contributions up to $300, even if you take the standard deduction. For married couples filing jointly, the maximum deduction is $600.  

If you were eligible for the third Economic Impact Payment (EIP) but did not receive it, or your payment was not for the correct amount, you may be able to claim this refundable tax credit

 If you are self-employed and had to take sick leave from your job, either for your own health or to care for a family member, you could receive a refundable tax credit to help make up for the loss in your income. The tax credit for paid family sick leave has been extended through September 30, 2021.

For tax year 2020 and going forward, the IRS has reinstated the use of Form 1099-NEC to report any compensation paid to non-employees by a company. Gig workers, contractors, and other non-employees will no longer use Form 1099-MISC to report self-employment income. 

3. Prepare for unique situations 

With a record number of Americans receiving unemployment compensation due to COVID-19, it’s important to understand the tax implications of those benefits. Unemployment income is taxable and is reported on Form 1099-G.  

Due to the pandemic, many employees have continued their work from home, and some have even decided to work remotely on a permanent basis.

It’s important to note that if you are a W-2 employee, the costs of setting up a home office are most likely not tax deductible because the Tax Cuts and Jobs Act eliminated the unreimbursed employee expenses deduction in 2018.    

4. Bookmark important info 

Keep our 2021 Refund Schedule on your radar. This calendar provides estimated refund delivery dates based on when you submit your return to the IRS. 

And finally, if you don’t have an existing account with TaxSlayer, create one for free. When you file with TaxSlayer, all the tax law changes are already accounted for in the software. Simply enter your information and let TaxSlayer do the calculations. Your return is guaranteed accurate, and you’ll get the maximum refund you deserve. Log in to get started filing. 

This article is up to date for tax year 2021 (returns filed in 2022).