2021 Enhanced Child Tax Credit

2021 Enhanced Child Tax Credit

On March 11, 2021, President Joe Biden signed into law the American Rescue Plan Act (No. 117-2). Under this Coronavirus relief package, the child tax credit was expanded. The previous credit of $2,000 per child under the age of 17 increased to $3,000 for children ages 6-17 (17-year-olds became eligible), and $3,600 for children under the age of 6. A portion of these tax credits were paid in advance unless you opted out of the payments or weren’t eligible. They are also fully refundable, meaning any credits not used by the taxpayer will be paid out to them. Although the maximum child tax credit has been increased, not everyone will get the entire expanded tax credit per child.

How much will I receive per child?

The number of credits you are eligible for depends on your Adjusted Gross Income (AGI),  number of children, and their age. Read More

New Rules in the IRS

The recently signed “Taxpayer First Act” will benefit anyone dealing with the IRS in several ways. The upgrades outlined in the bill will modernize the agency, as well as improve operations in communication and collections, which will be outlined in this article.

The main category to discuss is communication. The IRS can be a troubling agency to deal with, as taxes can be confusing, and no one wants to deal with a collection agency. With the new bill, communication should become much clearer. This will happen through directly communicating why a claim is rejected, upgrading the efficiency of IRS infrastructure, making it easier to report identity theft, and informing of common scams rather than using hold music. These changes will make the tax paying process more transparent and less intimidating.

The second category of changes is in collection practices. These changes include accepting direct payments for filing, rather than using a … Read More

Avoid an Audit

Facing an audit by the IRS can be a daunting situation for any individual or business. Even if all your taxes are in order, audits can take a lot of time and energy. Fortunately for the taxpayer, the IRS Restructuring and Reform Act of 1998 resulted in kinder and gentler practices from the IRS. Unfortunately, due to extremely low audit rates in years following, resulting in political embarrassment, audit rates have begun to climb back up. Everyone should make sure to file their tax return properly each year, but there are some people who should be warier of an audit than others. These people include high income earners, people filing a business tax form (especially large corporations), and people claiming the earned income tax credit (EITC). To avoid being audited, it may benefit you to treat the situation like a battle with the IRS, where the first defense is a strong … Read More