Tips for Taxpayers as Filing Deadline Approaches

As the April 18 filing deadline approaches, there are some important items taxpayers need to keep in mind as they get ready to file their tax returns.

“In general, you want to look at all the pieces that apply to you,” said JC Hobbs, Oklahoma State University Extension associate specialist for farm management and taxation. “Everything that’s pertinent to you should have been received, and everything that applies to you that might get missed are the IRA deduction, education credits and the child tax credit. Those are the big things people need to be aware of.”

Consider the following items:

• To ensure that your return is processed more efficiently and your refund is returned sooner, it is beneficial to electronically file (E-File) and elect to have the refund directly deposited into your bank account. The IRS has stated refunds will likely take six to eight weeks to receive if a paper tax return is filed (search for E-File on the IRS website).
• The Child Tax Credit for 2021 is $3,600 for each qualifying child under the age of 6 and is $3,000 for children 6 to 17 years old. Half of this credit was sent to taxpayers with qualifying children in the second half of 2021, and the remaining portion is allowed as a tax credit on returns filed this year (search for Fact Sheet 2022-17).
• Education tax credits provide some relief for taxpayers who are paying secondary education expenses for themselves or a family member. The American Opportunity Tax Credit is a refundable credit of up to $2,500 per student based on the amount of college expenses paid. The Lifetime Learning Credit is a refundable credit of up to $2,000. Both credits are based on the amount paid for tuition, fees, books, supplies and equipment (search for Publication 970).
• An item that can reduce the amount of tax due is the Individual Retirement Account (IRA) deduction. An individual under the age of 50 can contribute up to $6,000 ($7,000 for individuals 50 years or older) towards a traditional IRA. However, some restrictions may apply when a taxpayer’s adjusted gross income reaches a certain level or if they have a work sponsored retirement plan. It is important to understand all the rules and requirements for contributing to an IRA and getting the deduction (search for Publication 590-A).