Braithwaite Tax LLC

06/21/2021

Good info about the new child tax credit. If you have questions, reach out to Brent at Braithwaite Tax.

06/21/2021

New child tax credit amounts and changes. PLEASE read!

I'm reaching out to inform you about the increased 2021 child tax credit amounts and how the IRS is planning on paying a portion of those out beginning in July. You may have received a letter from the IRS giving you instructions with the option to opt out of those monthly payments.

So what changed? The American Rescue Plan enacted in March increased the child tax credit to $3,000 for ages 6-17 and $3,600 for children under the age of 6 (the 2020 child tax credit was $2,000). The increased amount is only for those married filing joint families with an AGI below $150k ($75k for single). The IRS has been directed to deliver half of the amount that families are eligible for in checks/direct deposit beginning in July. The payments will be worth up to $300/month for each child under age 6 and $250/month for each child ages 6 to 17.

These payments will be an ADVANCE of your 2021 child tax credit. The amount you receive will be reconciled to the amount that you are eligible for when you prepare your 2021 tax return in 2022. For example, a family with 2 children (ages 10 and 12), will receive HALF of the $6,000 child tax credit from July-December, which is $500/month. However, you will only receive the remaining half when you file your 2021 tax return next year. Potentially, this could result in paying more tax depending on your tax situation. Why? Because, according to my example, you normally receive a child tax credit of $4,000 but will only receive $3,000 when you file your 2021 tax return. Also, the IRS will be using your 2020 income and dependent information to calculate your monthly payments. As a result, if your income changed in 2021 (increased above the $150k) or you have a dependent that will turn 17 in 2021, this could alter how much child tax credit you will end up having to pay back.

You have the option to opt out of receiving these monthly payments and claim the FULL $6,000 (again, per example above) child tax credit on your 2021 tax return. The IRS is expected to release a tool called the Child Tax Credit Update Portal very soon that will allow people to opt out.

Please reach out to me if you are concerned how this could affect your individual tax situation.

02/05/2018

The new Tax Cuts and Jobs Act has provided a 20% deduction of all your income from sole proprietorships, partnerships and S-Corporations. This is a nice relief for all of you that are self-employed!

The Tax Cuts and Jobs Act (TCJA) creates a new tax deduction of up to 20 percent of income from partnerships, sole proprietorships, and other...

01/24/2018

Are you aware of the changes that will affect your taxes in 2018? Let me highlight a few of the major developments:

-The standard deduction has nearly doubled for each filing status ($24k for married filing joint, $18k for head of household, and $12k for single). As a result, you will no longer benefit from reporting state income tax, property taxes, mortgage interest or charitable contributions if you are are under that threshold amount.

-Personal exemptions are gone. This is the deduction you took for each person on your tax return. To make up for this, the child tax credit increased from $1,000 to $2,000 per child.

-State/local income and property taxes are limited to $10,000.

-No longer allowed to deduct moving expenses, alimony, or the net operating loss carryback.

-Tax rates across the board have been reduced.

Contact us if you want to know how you can reduce your tax liability!

The tax reform legislation that Congress will consider this week contains many provisions affecting individuals—and many changes from both the House and Senate bills.

01/20/2018

The IRS has announced they will begin accepting individual tax returns on January 29. You'll be receiving most of your tax documents within the next couple of weeks so let me know how I can help!

The IRS announced that this year’s filing season will begin about a week later than last year’s filing season.