Tax Tips for Everyone is created to provide updates on current tax topics and increase understanding of terms and issues on income and other taxes.
2020 Income Tax Filing Deadline Extended
The IRS has extended the tax filing deadline for individuals from April 15, 2021 to May 17, 2021. Tax payments can also be extended to May 17, 2021 without penalties and interest. No additional forms are required to use the later filing date. The IRS still recommends filing as soon as possible especially if receiving a refund and to help prevent fraud.
New $1400 Stimulus payment
The legislation called the American Rescue Plan includes another stimulus payment of $1400 per person. The major push of the direct payments of the stimulus was on March 17th with many individuals receiving theirs a few days before. The payment is based on an individual’s filing status on their 2019 or 2020 tax return. Individuals who have not received the stimulus payment can check on the IRS website about its status. The payments include adult dependents (over age 17) who were not included in previous stimulus payments. This stimulus has different limitations on who receives the $1400. Individuals making under $75,000 (couples $150,000) receive the full amount. Those making $75,000 to $80,000 (double for couples) will receive a lesser amount. Those making over $80,000 (couples $160,000) will not receive the payments.
Also, read Chris Sneed’s article on stimulus money spending recommendations.
Where is my Refund?
Individuals who have filed their 2020 tax return and are wondering about the status of their refund can check on it through the IRS website. Once on the webpage, click on the “Check My Refund Status” box and complete the simple instructions to learn the status of the refund.
Child Tax Credit Expanded
The American Rescue Plan bill includes a boost to the child tax credit for 2021. The credit (currently $2,000) increases to $3,600 per child under age 6 and $3,000 for children ages 6 to 17. Children age 17 are included where they were not previously. The new credit begins phasing out for individuals making over $75,000 (couples $150,000) and is phased out completely for those individuals making over $95,000 (couples $170,000). Those ineligible for the increased credit amounts will still be eligible for the $2,000 per child credit for individuals making up to $200,000 (couples $400,000). The legislation provides for advance payments of a portion of the new credit beginning possibly as early as July. Families with children under age six will receive $300 monthly payments per child for six months. For children between 7 and 17 the benefit is $250 monthly. The extended tax filing deadline may cause the payments to be delayed according to the IRS.