01/05/2022
Happy 2022 to all my tax clients! Another year and another tax season is upon us. There were many changes to the tax code again this year due to Covid. There were two major changes which affect most taxpayers.
Advance Child Tax Credit Payments
One of the biggest changes was sending out the Advance Child Tax Credit payments starting last July (2020) to those taxpayers with dependents under the age of 18. Unless a taxpayer opted out of the advance payments, they should have received $250 a month for children aged 6-17 and $300 a month for children under the age of 6 years old. The IRS used the information they had from a taxpayer's 2020 tax return when issuing the payments. When you come to do your 2021 tax return, we will need the total amounts received for each of your children in 2021. This amount will be reported on your tax return and will adjust how much of a total child tax credit you will receive. The IRS is supposed to start mailing out letters (Letter 6419) in late December and all through January for any affected taxpayer.
https://www.irs.gov/newsroom/irs-issues-information-letters-to-advance-child-tax-credit-recipients-and-recipients-of-the-third-round-of-economic-impact-payments-taxpayers-should-hold-onto-letters-to-help-the-2022-filing-season
Please bring this letter with you when you file your 2021 tax return. If you didn't get one, go through your bank statements starting in July 2020 - December 2020 to see how much, if any, of the advance child tax credit you received so we can report it correctly on your tax return.
Third Stimulus Payment ($1,400)
The other big change was the third stimulus payment of $1,400 that went out to every eligible taxpayer and dependents (limitations based on your income, as always). When you come file your taxes, we will need the amount you received for this third stimulus payment, along with anyone else listed on your tax return (spouse and dependents). The IRS was supposed to mail out Letter 6475 to every taxpayer who received the third stimulus payment. Bring this letter with you when you come to file your 2021 tax return, if you have it. If you don't have it, review your bank statements starting in March 2021 - December 2021 to see if you received the third stimulus payment. If you didn't receive the payment, we can put it on your 2021 tax return as part of your refund. You want to be ABSOLUTELY sure you didn't receive before we put it on your tax return. If we put it on the return, a human being at the IRS has to review the return before they will issue a refund. Based on 2020 refunds with the first 2 stimulus payments on it, it will take about 6-8 months!
IR-2021-255, December 22, 2021 — The Internal Revenue Service announced today that it will issue information letters to Advance Child Tax Credit recipients starting in December and to recipients of the third round of the Economic Impact Payments at the end of January. Using this information when p...
