WASHINGTON, D.C. — As the year winds down, the Internal Revenue Service (IRS) wants taxpayers to know about some changes they will need to consider on their tax returns, such as Economic Impact Payments and advance Child Tax Credit payments.
This is the second in a series of reminders to help taxpayers get ready for the upcoming tax filing season. A special page, updated and available on IRS.gov, outlines steps taxpayers can take now to make tax filing easier in 2022.
Here are some key items for taxpayers to consider before they file next year:
Check on advance Child Tax Credit payments
Families who received advance payments will need to compare the advance Child Tax Credit payments that they received in 2021 with the amount of the Child Tax Credit that they can properly claim on their 2021 tax return.
Taxpayers who received less than the amount for which they’re eligible will claim a credit for the remaining amount of Child Tax Credit on their 2021 tax return. Taxpayers who received more than the amount for which they’re eligible may need to repay some or all of the excess payment when they file.
In January 2022, the IRS will send Letter 6419 with the total amount of advance Child Tax Credit payments taxpayers received in 2021. People should keep this and any other IRS letters about advance Child Tax Credit payments with their tax records. Click HERE for more information.
Eligible families who did not get monthly advance payments in 2021 can still get a lump-sum payment by claiming the Child Tax Credit when they file a 2021 federal income tax return next year. This includes families who don’t normally need to file a return.
Economic Impact Payments and claiming the Recovery Rebate Credit
Individuals who didn’t qualify for the third Economic Impact Payment or did not receive the full amount may be eligible for the Recovery Rebate Credit, based on their 2021 tax information. They will need to file a 2021 tax return to claim the credit, even if they don’t usually file.
Individuals will also need the amount of their third Economic Impact Payment and any Plus-Up Payments received to calculate their correct 2021 Recovery Rebate Credit amount when they file their tax return to avoid a processing delay.
In early 2022, the IRS will send Letter 6475 that contains the total amount of the third Economic Impact Payment and any Plus-Up Payments received. People should keep this and any other IRS letters about their stimulus payments with other tax records. Individuals can also log in to their IRS.gov Online Account to securely access their Economic Impact Payment amounts.
Click HERE for more information.
Charitable deduction changes
Taxpayers who don’t itemize deductions may qualify to take a charitable deduction of up to $600 for married taxpayers filing joint returns and up to $300 for all other filers for cash contributions made in 2021 to qualifying organizations. For more information, click HERE.
Direct deposit recommended
Direct deposit gives taxpayers access to their refund faster than a paper check. Those without a bank account can learn how to open an account at an FDIC-insured bank or through the National Credit Union Locator Tool. Veterans should see the Veterans Benefits Banking Program for access to financial services at participating banks.
Links to online tools, publications and other helpful resources are available HERE.
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