If you received an Advanced Child Tax Credit, you have to reconcile the amounts received on your 2021 tax return. If you report the wrong figure, then your return will get moved to the Manual Review pile, and once that happens your return won’t be processed for many many many months due to staffing shortages and chronic underfunding of the IRS. If you are due a refund, this means your refund will be delayed many many many months. So, to avoid delays, please take a few extra minutes now to be sure the right figure is being reported on your 2021 tax return.
So, how do we ensure we are reporting the right figure?
- BEST Option: Get your transcript from the IRS website. This is the best option because the IRS transcript shows the figure that the IRS is expecting you to report.
- MEDIUM Option: Use Letter 6419 that the IRS mailed in December/January. This is the “medium” option because the IRS has quietly acknowledged that some of the letters are wrong.
- WORST Option: Gather your bank statements to show the deposit amounts – this is the worst option because payments came in different amounts over different days to different accounts and to each spouse. The IRS Commissioner has asked tax preparers not to file with just banking info and to use the Letter 6419 or the IRS transcript.
If you are a client of Cromwell Tax & Bookkeeping, we would love both the IRS transcript AND Letter 6419.
How to get your transcript online from the IRS?
- Go to www.irs.gov
- Click Get Your Tax Record
- Click Get Transcript Online
- Click Sign in to Your Account
- If you have an account, you can login. If you don’t have an account, you will have to create one using their ID.me system. (I have heard the ID.me system can be onerous so if you don’t want to deal with it, consider requesting a transcript by mail. See instructions below).
- Login using your new account
- On the right-hand side under Records click View Tax Records
- Click Get Transcript (blue button)
- Under Reason select “Other” and leave Customer file number blank
- On the next page go to Account Transcript and click 2021
- All activity on your account during 2021 will be on this transcript
- Please run the account transcript for both spouses if you are filing a joint return
How to get your transcript by mail?
If you cannot authenticate online you can request a transcript get paper mailed to you. It usually only takes 10 days so plenty of time to receive it and file your tax return on time.
- Go to www.irs.gov
- Click Get Your Tax Record
- Click Get Transcript by Mail
- Enter the requested information
- Click Account transcript
- Click 2021
- Please request account transcript for both spouses if you are filing a joint return