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Prepare for Filing Your 2021 Tax Return

By: Tax Hotline
Winter 2022 (Vol. 39, No. 4)

Deadline - April 18, 2022

Still time to contribute to a retirement account. You have until April 18, 2022 to maximize your contributions to a traditional IRA or Roth IRA. If you have a Keogh or a SEP and get a filing extension until October 17, 2022 you have until that deadline to make contributions. The maximum contribution to a traditional IRA is $6000 or $7000 if you were age 50 or older in 2021. The maximum for SEP and Keough accounts is $58,000.

To qualify for the full IRA deduction, you must be ineligible for participation in a company retirement plan or if eligible, have adjusted gross income of $66,000 or less for singles or $105,000 for married couples filing jointly. If you are not eligible for a company plan but your spouse is, you can still deduct your traditional IRA contribution if your combined income does not exceed $198,000.

Did you fail to make your full estimated tax payment? Individuals who receive a substantial amount of non-wage income like self-employment income, investment income, taxable Social Security benefits, and in some instances, pension and annuity income should make quarterly estimated tax payments. The last payment for 2021 was due on January 18, 2022. You can use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts to see if you owe a penalty for underpaying your estimated tax. The law allows the IRS to waive the penalty if:

You didn’t make a required payment because of a casualty event, disaster, or other unusual circumstance and it would be inequitable to impose the penalty, or you retired (after reaching age 62) or became disabled during the tax year or in the preceding tax year for which you should have made estimated payments, and the underpayment was due to reasonable cause and not willful neglect.

Gather and Organize Tax Records. Organized tax records make preparing a complete and accurate tax return easier. They help avoid errors that lead to processing delays that slow refunds. Having all needed documents on hand before taxpayers prepare their return helps them file it completely and accurately. Important tax records you need to file a return include:

  • Forms W-2 from employers

  • Forms 1099 from banks, issuing agencies, and other payers, including unemployment compensation, dividends, distributions from a pension, annuity, or retirement plan

  • Form 1099-K, 1099-MISC, W-2, or other income statements for workers in the gig economy

  • Form 1099-INT for interest received

  • Other income documents and records of virtual currency transactions

You should also gather and review any supporting documents from these types of earnings such as paystubs, financial statements and purchase receipts to make sure the forms you received reflect the correct amounts. For tax purposes, be sure to keep all these documents for at least three years.

Also, be sure to have your previous two years tax returns on hand for important information. All these documents will help you determine if you are eligible for deductions or credits. For example, people who need to reconcile their advance payments of the child tax credit and premium tax credit will need their related 2021 information. Those who did not receive their full third Economic Impact Payments will need their third payment amounts to figure and claim the 2021 recovery rebate credit.

You should also keep end of year documents such as:

  • Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments

  • Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the recovery rebate credit

  • Form 1095-A, Health Insurance Marketplace Statement, to reconcile advance premium tax credits for Marketplace coverage

Confirm Mailing and Email Addresses and Report Name Changes. To make sure forms make it to you. To make sure forms make it to you on time, confirm now that each employer, bank, and other payer has your current mailing address or email address. People can report address changes by completing Form 8822, Change of Address and sending it to the IRS. Taxpayers should also notify the postal service to forward their mail online at or their local post office. You should also notify the Social Security Administration of a legal name change.

View your IRS Account Information Online. You can access your individual account information including balance, payments, tax records, transcripts and more. Taxpayers can set up their online account at If you have already set up an Online Account, make sure you can still log in successfully.

Review Proper Tax Withholding and Make Adjustments if Needed. You may want to consider adjusting your withholding if you find you owe taxes or receive a large refund in 2021. Changing withholding can help avoid a tax bill or let you keep more money each payday. Life changes – getting married or divorced, welcoming a child, or taking on a second job – may also be reasons to change withholding. Its recommended to complete a new Form W-4, Employee’s Withholding Certificate, each year and when personal or financial situations change.

Do you need more time to file? You can get an automatic extension of time to file your tax return by filing form 4868 by April 18, 2022. This gives you an extra 6 months, extending your filing date to October 17, 2022.

This is not an extension on paying your tax bill – so if you owe, you will still need to make payment by April 18, 2022 or face a late-payment penalty.