Tips for tax pros and individual filers included
The South Carolina Department of Revenue has some tips on getting ready for the coming tax season. They say that taking steps now to make sure you are organized and prepared can save time, headaches, and even money later.
Tax professionals are reminded to renew your IRS-issued Preparer Tax Identification Number. The PTIN is required by December 31, 2021, if you plan to serve as a tax preparer in 2022. Renewals and new applications take about 15 minutes and cost around $36. Get started at irs.gov/PTIN. Tax professionals are reminded to learn more about the DOR’s direct deposit refund option so they can recommend it to clients. Review your business information security plan. The Federal Trade Commission’s Safeguard Rules require financial institutions to establish and follow a written information security plan to protect sensitive customer information. They are also reminded to register for e-News for Tax Professionals through the IRS website to receive quick alerts from the IRS and through dor.sc.gov to get email newsletters from SCDOR. Tax professionals are also reminded to revoke power of attorney or third-party authorization forms for taxpayers who are no longer clients. This helps safeguard taxpayer records.
For individuals, SCDOR recommends waiting to file until you have the right documents, including W-2s, 1099s, and other withholding information. Know when the IRS and SCDOR will begin accepting returns, as returns will not be processed until after that date. Take time to organize your records, including W-2s, 1099s, receipts, medical bills, and any other documents that might affect your return. If you plan to claim the motor fuel credit, gather your gas and vehicle maintenance receipts. You should store those in a secure place and maintain accessible backups.
Individuals are reminded to review electronic filing and refund options. These save time, increase security, help you avoid errors, save tax dollars, and get your refund in the bank as quickly as possible. Last year, 93% of returns were filed electronically, and 87% of taxpayers who received a refund got it through direct deposit. If using a tax preparer, make sure you ask to receive any refund through direct deposit before the preparer submits your return. Familiarize yourself with MyDORWAY through the DOR website. It is the fastest, easiest way to make a payment.
Review tax credits and deductions that you may be eligible to claim. Keep in mind that for many credits, the amount will change for this filing season. Pay special attention to the Earned Income Tax Credit, which helps low-to-moderate-income workers and families get a tax break. The state credit increases to 83.33% of the federal credit this year.
Finally, protect against identity theft. Do not share personal information, such as your Social Security Number, bank account information, or refund amount online or in social media posts. Make sure your computer is protected with strong passwords, updated operating systems, and security software. Find out more at dor.sc.gov/securitycenter.