Changes you may need to know about for the upcoming tax filing season
FORT WAYNE, Ind. (WPTA) - Tax season is fast approaching, something that can increase anxiety levels. You should be ready for filing challenges if you have kids, received a stimulus check this past year, or gave money to charity.
The expanded Child Tax Credit for 2021 set up delivery of a portion of the payments in advance to get money to families quicker. If you received too little through the advanced payments, you will be due an additional amount on your tax return. Some people received too much and will have to pay the excess back.
Cassie Dunn, a managing partner with the local accounting firm Haines, Isenbarger and Skiba says letters from the IRS are going out to parents and you’ll need to give it to your tax preparer to get your return handled correctly.
“If you don’t include the proper amount from that advanced child tax credit on your tax return your return will get hung up with the IRS and delay your refund,” Dunn said.
Letters are also being sent out to folks who got a stimulus check last year, and you’ll need to reference that in filing your return as well, to avoid making processing delays with the short-staffed IRS even more lengthy.
“I guess by the IRS’ own admission through their taxpayer advocate service, they are somewhat of a ‘hot mess’ this year, and we shouldn’t expect that’s going to improve anytime soon,” said David Cole, the tax practice leader for the same firm.
Private wealth advisor Todd Larson says in 2021, even if you’re not able to itemize, you’re still able to write off charitable giving up to $600 for married filing jointly and $300 for individuals. But he says you’ve got to keep receipts, proving you made the donations.
People who got unemployment compensation in 2020 didn’t have to pay taxes on the first $10,200 received. That benefit does not apply to unemployment money received in 2021.
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