I’ve included a couple of links and references in the “Worth Noting” section of The Daily Digest this week with details about income tax returns, but wanted to put everything together and share access to a webinar recording on the topic of how companies in the ARM industry should be approaching tax season this year.
The Internal Revenue Service announced this week that it will start accepting 2021 income tax returns on Monday, January 24. That is 17 days earlier than last year. The start date is being bumped up because it “allows the IRS time to perform programming and testing that is critical to ensuring IRS systems run smoothly,” the agency said in a press release.
Not only do people get to start filing their returns earlier, they will have more time than usual to file. The deadline to file 2021 returns will be April 18 this year, because Emancipation Day is being observed in Washington, D.C. on April 15. Two states — Massachusetts and Maine — will each get an extra day on top of that because April 18 is Patriots Day.
The IRS says it is still aiming to process completed returns within 21 days of receiving them — its usual turnaround time. That might be challenging, given the status of the agency. During the first six months of 2021, the IRS had 15,000 employees to manage the more than 240 million calls it received. That works out to 16,000 calls per employee. That already has some lawmakers considering extending the deadline to allow people to file their returns.
The average tax return in 2020 was $2,827, a 13% increase over the previous year. The average refund is equivalent to nearly six weeks of take-home income for a family in the United States. That figure is expected to drop in 2021, given that many people across the country received their Child Tax Credit already as part of the government’s stimulus program in response to the COVID-19 pandemic. As such, companies in the ARM industry need to make the necessary preparations for a tax season that is unlike what it has seen in the past.
