If you were required to file 2021 taxes, hopefully you did so by April 18 … or at least filed for an extension. This was the first time in two years federal taxes were due in April, and millions of taxpayers rushed to file at the last minute.
While most folks would rather forget about their taxes for another whole year, there are a few actions that you should take before filing away all those forms and documents.
1. Check the Status of Your Return
The IRS says that it issues 9 out of 10 refunds within 21 days. However, some returns require additional review, and the IRS has issued a statement explaining why some might take more time, with reasons ranging from errors to suspected identity theft. One thing is clear: Don’t count on receiving the money by any particular date.
If you’re curious about the status of your refund, you can use the IRS’ Where’s My Refund tool 24 hours after e-filing and four weeks after mailing in your return. The status is updated daily.
2. Have a Plan for Your Refund
You may not know when your refund will arrive, but you should have some idea what to do with it when it does. Whether it’s boosting your emergency fund, paying off debt, or saving for your kids’ education, have a concrete plan in place. Otherwise, that money may get treated (and spent!) as an unexpected windfall.
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3. Revisit Your Withholding Amounts
If you had an unexpectedly large refund or, conversely, an unexpected tax bill, then you might want to adjust the amount withheld from your paycheck or your retired pay.
Remember, a huge refund generally means that you gave the government an interest-free loan. On the other hand, if you withhold too little, you may be subject to penalties and be forced to make estimated payments in the future.
The IRS has a withholding estimator you can use to figure out your federal tax withholding. If you have no earned income, only a pension, then you can use Form W-4P to determine the correct amount of tax to withhold.
Have more financial questions? Visit MOAA.org/Finance for the latest news, resources for MOAA members, and more. You can also visit MOAA’s Military State Report Card and Tax Guide for up-to-date details on your state taxes.