Changes to Know for 2021 Tax Return Filings

(KNSI) — Taxpayers have just a few weeks left to get their returns prepped and sent off to the IRS, but some changes to tax filings may require professional help.

The American Rescue Plan increased the Child Tax Credit from $2,000 per child to $3,000 per child for children over the age of six and from $2,000 to $3,600 for children under the age of six and raised the age limit from 16 to 17. As of July 15th, most families automatically received monthly payments of $250 or $300 per child. Parents who didn’t want the payments had to opt out.

The Economic Ninja says some of the confusion surrounds the child tax credit. “The families who didn’t get monthly advancement payments in 2021 can still get a lump sum payment by claiming the child tax credit when they file their 2021 federal income tax return.”

Some may choose to use a tax preparer, but Eric Smith of the IRS says that the agency has tried to make it pretty easy for first time filers or those who usually don’t file to, even if they only have one reason for filing. “People can use free file if they want to take advantage of that option. Even if their only reason for filing the return is to claim the recovery rebate credit.”

A change of itemized charitable deductions can be taken advantage of with your 2021 tax return. The law now allows taxpayers who elect to take the standard donation to claim a limited deduction on their 2021 federal income tax returns for cash contributions made to certain qualifying charitable organizations.

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