PITTSBURGH — It’s that time of year. We’ve all received our W-2s and 1099s to file our taxes, and this year, more than ever, it’s a good idea not to procrastinate.
Channel 11’s Angie Moreschi explains why and has three important things you need to know before you file.
Child tax credit confusion
If you received COVID-19 relief money, confusion persists about how much tax you need to pay. That means start early is more important than ever to fix the problems.
First of all, if you have children, now is the time to fix those child tax credits. In 2021, millions of eligible families received six advance payments of up to $300 for the expanded child tax credit. This amounted to up to $1,800 per child under age 6 or $1,500 per child aged 6 to 17.
To claim the second half of the expanded child tax credit, you must enter specific information about your 2022 taxes. You should have received something called Letter 6419 from the IRS which details the total amount of prepayments you have. received.
If you have chosen not to receive advance payments, failed to receive paymentsor have too much, it’s time to reconcile that on your 2022 taxes. Also, if you received more than you can properly claim, the IRS says you must repay that amount.
Financial Expert Shana Bielich with Coghill Financial Investments says it’s important to understand that the government has based the amount you received on your 2020 tax income. So any changes could make a difference to the amount you’re expected to receive.
“The thing consumers need to be aware of is what if their income changed drastically year over year from 2020 to 2021? Or what if you have a baby or adopt a child in 2021 – you can claim these credits on your 2021 tax return, so you just need to be aware of that,” Bielich said.
Additional stimulus payment
There was a third stimulus check worth up to $1,400 that was sent to millions of qualified Americans in 2021. This qualifying amount was up to $75,000 for single filers and up to $150,000 for married filers. Dependents were also entitled to a payment of $1,400.
Bielich says the most important thing here is to make sure you got it if you qualify.
“You can still claim this credit when you file your return. It’s called recovery rebate credit,” she explained.
Another thing to note here: If your income changed from 2020 to 2021 and you ended up earning too much to actually qualify for the third stimulus check but you still got it, you you don’t have to pay it back — unlike the tax credit for children.
Delays are likely
Finally, the last thing you really need to know is that delays are likely for many as the pandemic backlog is still uncleared.
“It was a real challenge,” Bielich said. “The IRS said they expect their refunds to be processed within 21 days, but we have people waiting over 270 days for a return.”
There are three key things you can do to try to avoid getting stuck in the backlog.
- Be very careful not to make mistakes; double-check and triple-check your return to make sure there are no errors.
- File electronically – paper simply takes longer to process.
- Use direct deposit to speed up your refund.
Deadline April 18
This year you will have three extra days to file your case because April 15th is a Friday Emancipation holiday in Washington, D.C. The IRS has extended the deadline to Monday April 18th, but it would be wise not to not wait long.
CLICK HERE for five things the IRS says to remember before you file.