I’m a Certified Public Accountant with a Master’s Degree in Taxation from Florida State University. This tax season is my 23rd year preparing taxes. Every year, I wait until the end of the year to get the updated tax law changes for the current tax season year. I’m a tax season child. My mom and grandmother have owned their business in the Pace/Pensacola area since the 70s. It was natural for me to follow in their footsteps.
As with every year, the tax law for individuals change. I’m here to cover some essential updates and how they affect you for the 2021 tax year.
The deadline to file your individual tax return is April 18, 2022.
Changes for the 2021 tax year:
Standard deduction
$12,550 for single filers and married couples filing separately (an incrase of $150 from 2020).
$18,800 for heads of households (an increase of $150 from 2020).
$25,100 for married couples filing jointly (an increase of $300 from 2020).
For 2021, single filers not itemizing can claim a $300 cash donation, and married couples filing jointly can claim a $600 cash donation without having to itemize (an increase of $300 from 2020).
The child tax credit has increased to $3,000 per child 17 and under. If your child is five and under, you could receive $3,600 per child.
No earned income requirement this year.
Your AGI must be below:
$75,000 for single filers
$112,500 for head-of-household filers
$150,000 for married couples filing jointly
The IRS has been making advance payments on the child tax credit. Those advance payments started in July 2021 and continued through December 2021.
***Important***
You should receive a letter 6419 showing you how much of the child tax credit you received during the year. You will need that amount to file your tax return. Do NOT throw away the letters from the IRS (Never throw away letters from the IRS).
Families who received advance child payments will need to file a 2021 tax return and compare the advance payments they received during the year with the amount of the child tax credit they can claim on their 2021 tax return. You could owe some of this money back if you received more than you should have received.
The federal government issued a third stimulus payment in March and April of 2021. You will also need the amount you received when filing your tax return. You will not have to repay the stimulus but could be entitled to more money if you did not receive the total amount initially.
The IRS started issuing Letter 6475, Your Third Economic Impact Payment, in January. The letter will help determine if you are entitled to and should claim the recovery rebate credit on your 2021 tax returns when filing in 2022.
The standard mileage rate fell again to 56 cents per business mile.
Long Wait Times
Because of the Advance Child Tax Credit payments and the 3rd stimulus, the IRS has already cautioned about extremely long waits for refunds. It is crucial not to file your return until you have the correct numbers, as it could extend your refund even longer.
Quick Links
- Find Your Child Tax Credit Payments
- Find Economic Impact Payment Amount
- Check Your Tax Records
- Check Your Refund
We are currently taking new clients for Individuals. If you would be interested in any accounting and tax services, please feel free to contact me at Maddox-Burton, PA.
