12/31/2021
To all our tax clients,
First of all HAPPY NEW YEAR everyone! Hopefully this new year will be a better one for all of us.
As you know 2022 TAX SEASON FILING is coming up, I am sure some of you are looking forward to file early so you can get your refund as soon as possible and some of you who have to pay instead of getting a refund will probably wait until April 18 to file; in either case please make your appointment as soon as possible; this year many changes were made to the tax laws and because of these changes it will require a little more time to complete your tax return; so if you can, try to make your appointment as early as possible.
If you have children you are probably familiar with some of the tax credits available to you when you file your tax return, the most popular tax credits are: the Child Tax Credit, the Credit for Child and Dependent Care, the Earned Income Credit and the Educational Credits.
As I mentioned before, for Tax Year 2021 several changes were made to these credits; in this Post, however, I am going to mention only the changes made to the CHILD TAX CREDIT:
• CHILD TAX CREDIT: Generally taxpayers can claim this credit
up to $ 2,000.00 for each child.
• To qualify for this credit the child:
• must be under 17 years of age on December 31;
• must have lived with the taxpayer for more than six months of
the year;
• did not provide over half of his/her own support;
• meets the relationship criteria;
• is a U.S. citizen, U.S. national or resident of the United States
• has a valid Social Security number
The new Law (THE AMERICAN RESCUE PLAN ACT OF 2021) made some changes to this CREDIT, they are temporary changes and they are applicable only to tax year 2021 (at least for now); these changes are:
• The amount of the credit has been increased from $ 2,000.00 up to $ 3,000.00 per qualifying child between the ages of 6 and 17 at the of 2021 and $ 3,600 per qualifying child under the age of 6 at the end of 2021.
• This credit is fully refundable, that means even if you do not owe any taxes you will still get the full credit (subject, anyway to the income limits)
Many families with children already received ADVANCE PAYMENTS of the Child Tax Credit up to the end of December and in January 2022 you will receive a letter from the IRS "Letter 6419" indicating the total amount you received. This letter is very important and you need to bring it to us with the rest of your tax papers so we can reconcile the advance payments you received with the correct amount you should have received.
That is all for now. Happy New Year again.
