New Tax Laws? They’re Right Here, As Well As Where To File In Amarillo
It's everyone's favorite time of year...tax season.
For some, it's actually a welcome sight because they have a refund coming.
For others, it can be a massive source of stress as they'll owe money to the IRS.
Every year, there seems to be changes to tax laws that can affect your return. This year is no different. However, there are only a few changes this year so let's make sure we've got you caught up on them.
CHILD TAX CREDITS
So for a lot of those with children, you noticed you were getting payments on the 15th of each month for the last six months of 2021. What some may not know is that this wasn't like the stimulus payments where the government just dropped money in our accounts to help us.
This was a partial advance of the child tax credit parents claim each year per kid. You have to report the amount received on your taxes when you go to file for 2021. It's something that could increase or decrease your refund, and it could also potentially force some people to owe. It's all dependent on income and other factors.
If your child tax credit is higher than what you've already received, you'll be able to claim the remaining amount on your taxes and that will help with your refund. However, if you received more than you qualify for, you'll find that you have to pay back the overage amount. If you don't fully understand what you need to do with this, please reach out to a tax professional.
RECOVERY REBATE TAX CREDIT FOR STIMULUS PAYMENT
So this change will only apply to certain people. It's only for those who either didn't receive a third stimulus payment, or received less than the $1400 that was given.
In order to claim this, you'll need to know the amount of you third stimulus payment. The IRS will send you a letter sometime early this year, and it'll be Letter 6475 you're watching for. This letter will show you the amount of your third stimulus payment.
If you qualify for this, there will be a worksheet that you'll need to fill out in order to receive it. Again, a tax professional can help you with this if you're confused by what you need to do or if you qualify for this.
CHARITABLE CONTRIBUTIONS NO LONGER NEED TO BE ITEMIZED
In the past, the IRS required you to itemize each charitable contribution made with who it went to and how much you donated.
For the 2021 tax year, you no longer need to do this. You'll be able to deduct up to $300 for cash donations you made to qualifying charities, up to $600 for married filers.
Now, you can receive a bonus on this from the IRS if you DO decide to still itemize the contributions. In previous years, the deduction was limited to just 60% of your AGI (Adjusted Gross Income). However, for tax year 2021 it'll be 100% of your AGI if you itemize them. Nice little incentive if you ask me.
WHERE YOU CAN GO TO HAVE SOMEONE DO YOUR TAXES
If you aren't comfortable doing your taxes yourself, there are plenty of professionals here in Amarillo you can go to.
For example, there are numerous locations for companies such as H&R Block, Jackson Hewitt and Liberty Tax. Some are standalone locations, some can be found in places like Walmart. They are safe options with pros who know how to get the most out of your return. They also offer advances on your tax return once it's finished, pending qualification.
There are also local tax companies if you decide not to go with a big box tax preparer. Usually any certified CPA can prepare them for you and local businesses like Preferred Tax Service will be able to maximize that return for you.