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IRS for Inflation Relief: Wait Filing Your Taxes If You Get A Cheque in 2022.

IRS for Inflation Relief: Wait Filing Your Taxes If You Get A Cheque in 2022.
This week, the Internal Revenue Service said that people can apply to be on the Internal Revenue Service Advisory Council in 2023. (Photo: https://www.mychesco.com/)
In states like California that implemented special payments or additional refunds last year to provide aid to struggling taxpayers, the Internal Revenue Service (IRS) on Friday issued a sort of “keep tuned” alert that might delay the filing of many tax returns.

For taxpayers in areas like Michigan where $180 inflation relief payments may be authorized by the state Legislature and become a reality next year, the IRS’s recommendations in the coming days could be crucial.

 

IRS: Wait Filing Your Taxes If You Get A Cheque for Inflation Relief in 2022.

In this 2013 file photo, you can see the outside of the Internal Revenue Service (IRS) building in Washington. The IRS is a favorite target for criticism in Washington, and it may finally get the money it has been asking Congress for. (Photo: Susan Walsh)

 

The IRS tells millions of people to wait to file their taxes.

Even though extra money from other states was welcome last year, when inflation was high and there were still questions about the pandemic, it has led to a long list of questions about taxes.

Right now, there are arguments about what needs to be on the federal return and what is taxed. If you live in a state with a special refund program, you may not be able to use the advice you get there in other states that gave out extra payments in 2022.

The Internal Revenue Service sent out a short notice on Friday that showed how confusing tax time will be early this year based on payments made by different states in 2022.

Mark Steber, who is in charge of taxes at Jackson Hewitt Tax Service, said that the current tax situation is “a mess.” Steber said, “Many questions, few answers.”

How a state sets up a refund or rebate is a big part of whether or not the federal government will tax it.

Steber said that most of the time, the federal government doesn’t tax certain types of payments made by states to Internal Revenue Service taxpayers. Steber said that the proposed $180 payments might not be taxed at the federal level if Michigan goes with a refundable income tax credit for taxpayers based on redistributing the state’s surplus.

Steber said that the early signs were that these proposed payments from Michigan would not be taxed. Still, he said that it would be wise to wait until the IRS makes things clear. “The good news is that these Michigan payments can be taken care of before the next tax return is due,” Steber said.

There is also some confusion right now because many people are filing their tax returns for 2022 before the April 18 deadline. Where do state payments stand in terms of being taxed? In general, a payout is considered taxable unless the Internal Revenue Code gives a reason why it isn’t. But nothing here is clear.

IRS for Inflation Relief: Wait Filing Your Taxes If You Get A Cheque in 2022.

The IRS said last week that it will start taking and processing tax returns for 2020 on February 12, 2021, which is two to three weeks later than in the past. (Photo: https://www.marcumllp.com/)

 

What does the IRS have to say at the start of February?

The IRS said it knows about the concerns. In a Feb. 3 statement, the IRS said, “We are working with state tax officials as quickly as possible to give taxpayers more information and clarity.”

Read More About IRS:

When is IRS Accepting Tax Returns 2022? Credits and Deductions Unveiled!

2023 Tax Refund of IRS: What Should You Expect?

Guidance on State Tax Payment – IRS

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