2021 Tax Season is upon us
How is this even possible? It feels like 2020, heck even 2019, has not even ended yet.
Many new laws were passed in 2021 that may affect your tax return. The biggest change has been the Advance Child Tax Credit (ACTC). If you have dependent children, you may have been receiving payments over the last few months for these children. You should receive a Letter 6419 from the IRS with totals received. You will need to provide this to your tax preparer to reconcile, to ensure that you received the total credit you were due (and no more). If you are in a situation where you have a child that is split between two people every other year, you may have some problems. While I do not anticipate this situation with any of my current clients, I see this getting very messy. If you need help, please do not hesitate to contact us!
There is also the 3rd stimulus payment that you may or may not have received back in December 2020/January 2021. This, like the 2020 stimulus checks, was calculated based on previous year filings, and will need to be reconciled to ensure that you received the correct amount.
There is an additional deduction for charitable contributions up to $300 ($600 if you are married filing jointly), which is available even if you are not eligible to itemize. Make sure that you share this information with me when preparing your taxes so that we take advantage of every opportunity to lower your taxes!
The last major item I want to address is the change from $20,000 to $600 in yearly payments via places like Pay Pal, Zelle, etc. It is truly not as scary as it sounds or as people are making it out to be. If you are sending money back and forth through these sites, and it is truly not taxable income, you should not even receive one of these forms. (And, if you do, and it is truly not taxable income, your friendly tax professional knows how to make sure that it is not taxed to you yet still reported on your tax return so that you do not look like you are trying to hide income). If you have been using these services to hide income, well, then it's time to stop cheating and pay taxes on your income.
If you are a current client, organizers were uploaded to the portal today and will be mailed tomorrow.
If you are looking for a tax preparer, we are accepting new clients!