Tax season begins today, but NC won't process state taxes until February
Monday was the first day federal tax returns can be filed. But the Internal Revenue Service is warning of delays due to staffing shortages and complicated filings with all the child tax credits and stimulus payments that went out last year.
"This may be a year we do have to get some professional advice and I think if that's the case, we need to make that decision early," said Tammy Van Duyn, who works at Micham and McSwain CPAs in Raleigh.
Tax preparers say the best thing people can do right now is to gather all the documents needed to file taxes.
"We don't need everything to get your returned started," said Van Duyn. "We just want to be able to get started and then we can look at your return and kind of know what you're still missing.
Tax Advisors of Cary partner, Robert Mayhew, said his team is preparing to more than than 1,000 individual tax returns.
"It’s three months of insanity," said Mayhew.
Mayhew said he's added more staff to keep up with the increase in clients as changes to tax laws make filing more complex.
"I think folks are going out online and looking at ways to self-prepare income tax, and I think they look and go, 'Mmm, no,'" said Mayhew.
He adds that to make filing taxes smoother — gather all the necessary documents now, including W-2s from employers and any 1099 forms from other sources of income.
This year, the IRS is sending families a Letter 64-19 showing how much they received from the Advance Child Tax Credits last year. The Child Tax Credit increased to $3,600 for children under 5 or under and $3,000 for children ages 6 to 17.
"You may have to pay back some of those child tax credits, and that's something to be conscious of," said Mayhew.
The Child Tax Credit begins to be reduced to $2,000 per child if your modified AGI in 2021 exceeds:
- $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
- $112,500 if filing as head of household; or
- $75,000 if you are a single filer or are married and filing a separate return.
Plus, anyone who got an economic impact payment - or stimulus - should watch the mail for a Letter 64-75.
"Just give it a minute. Let the documents show up and make sure you've got reporting from all third-party sources where you've made money or kept money," said Mayew.
Federal and state filings can be submitted at the state time, but the state Department of Revenue won't process returns until mid-February.
"Most of the staff that are involved in this process are working long hours to make sure we can open tax season as soon as possible and begin issuing refunds," said NCDOR Assistant Secretary Anthony Edwards.
NCDOR said it needs more time to make updates based on tax law changes approved in the state budget late last year.
"We must be thorough in our testing and validation of our tax systems and our forms to make sure everything is accurate and that would transition into a smooth filing season," added Edwards.
Edwards said NCDOR expects to start sending refunds in mid-March, while the IRS said most taxpayers who file electronically should get their refund within 21 days.
The last day to file is April 18.
