Infinity CPA Group LLC

IF YOU'RE EXPECTING A REFUND, READ THIS!

If you’re getting a refund, here are four useful tips to know.

1. THE AVERAGE REFUND IS MORE THAN $3,500. Through February 18, the IRS reports the average refund is $3,536, which is up 22% versus the same time last year. Since a refund is really your money to begin with, it’s like giving the federal government an interest-free loan.

TIP: If you’re getting a big refund this year due to overpayment of tax, it may be worth adjusting your withholdings to eliminate overpayment for 2022.

2. MOST REFUNDS STILL ARRIVE WITHIN THREE WEEKS. The IRS says it issues nine of 10 refunds within 21 days. However, electronically filed returns will usually get a refund faster than those filed by paper in the mail. Don't expect that turnaround with a paper filed return, however. The IRS says they are still processing a backlog of last year's returns and don't expect to be caught up until year end.

TIP: The best way to check the status of your refund is by visiting https://www.irs.gov/refunds. While you can see the status of your refund, there isn't a whole lot you can do about it until the IRS processes the refund.

3. SOMETIMES REFUNDS ARE WRONG. If your refund isn’t the amount you expected, there could be multiple reasons why. The primary culprit may be caused by the numerous incentives available during the 2021 tax year, driven by the increased Child Tax Credit. But there could also be a typo or calculation error, or the IRS may have disallowed some deductions or credits. If you owe other debts to the government, they may have these garnished from your refund check.

TIP: If your refund amount is different than the amount on your tax return, try to understand why this is the case before cashing the check. Follow up with the IRS for an explanation about the missing amount. Amounts cashed that are larger than you expect can actually cause problems if the IRS expects repayment.

4. CON ARTISTS PREY ON REFUND CHECKS. Year after year, IRS scams are among the most commonly reported frauds. Con artists call unsuspecting taxpayers and claim to be from the IRS. They say that you owe money or that a refund was issued in error and demand immediate repayment.

TIP: An IRS agent will never call a taxpayer over the phone without first sending an official letter, and will neither threaten a taxpayer nor demand immediate payment. They’ll also never ask for credit card or debit card numbers over the phone. If you are contacted by a suspected scammer, report it to the IRS by calling 800-366-4484.

Refunds | Internal Revenue Service Get information about tax refunds and track the status of your e-file or paper tax return.

IT'S TAX TIME! ESTIMATED TAXES ARE DUE.
Now is the time to file your taxes and make your estimated tax payment.

Both your individual tax return AND first quarter estimated tax payment are due by Monday, April 18th. Here is what you need to know.

FIRST QUARTER DUE DATE: MONDAY, APRIL 18, 2022

THE ESTIMATED TAX PAYMENT RULE

You are required to withhold or prepay throughout the 2022 tax year at least 90 percent of your 2022 total tax bill, or 100 percent of your 2021 federal tax bill.* A quick look at your 2021 tax return and a projection of your 2022 tax obligation can help determine if a quarterly payment might be necessary in addition to what is being withheld from any paychecks.

THINGS TO CONSIDER

UNDERPAYMENT PENALTY. If you do not have proper tax withholdings throughout the year, you could be subject to an underpayment penalty. A quick payment at the end of the year may not be enough to avoid the underpayment penalty.

W-2 WITHHOLDINGS HAVE SPECIAL TREATMENT. A W-2 withholding payment can be made at any time during the year and be treated as if it was made throughout the year. If you do not have enough to pay the estimated quarterly payment now, you may be able to adjust your W-2 wage withholdings to make up the difference.

SELF-EMPLOYED. In addition to paying income taxes, self-employed workers must also pay Social Security and Medicare taxes. Creating and funding a savings account for this purpose can help avoid the cash flow hit each quarter to pay your estimated taxes.

USE YOUR REFUND? An alternative option to pay your 2022 first quarter estimated tax is to apply some or all of your 2021 tax refund.

PAY MORE IN THE FIRST QUARTER. By paying a little more than necessary in the first quarter, you can be in a position to adjust future estimated tax payments downward later this year if your 2022 tax obligation appears that it will be lower than you originally thought.

NOT SURE IF YOU NEED TO MAKE A QUARTERLY PAYMENT? Take a quick look at your 2021 tax return to see the amount of tax you paid. Divide the tax by the number of paychecks for the year. Is enough being withheld from your paycheck? Consider adjusting your withholdings with your employer if you think it is necessary to cover your 2022 tax bill.

*If your income is more than $150,000 ($75,000 if married filing separate), you must pay 110 percent of your 2021 tax obligation to be safe from an underpayment penalty on your 2022 tax return.