Get Ready for Tax Time!

As you gather your W-2, 1099s and other tax documents for your CPA, be on the lookout for a new letter from the IRS.

According to their website, “In early 2022, the IRS will send Letter 6475 that contains the total amount of the third Economic Impact Payment and any Plus-Up Payments received. People should keep this and any other IRS letters about their stimulus payments with other tax records. Individuals can also log in to their IRS.gov Online Account to securely access their Economic Impact Payment amounts.” In plain English, this letter will list your stimulus payments for 2021.

Here is a link to the IRS webpage with additional advice.

https://www.irs.gov/newsroom/get-ready-for-taxes-whats-new-and-what-to-consider-when-filing-in-2022

Now the IRS is also sending a letter for the advanced payment of the 2021 expanded child tax credit. If you’re like me with a minor child still in the house, you automatically received child tax credit payments on the 15th of each month, unless you opted out. For some taxpayers, this credit is a very healthy amount. However, it is not “free money” but rather an advance of the tax credit allowable on your 2021 return, assuming you qualify. If you received the advance child tax credit, then you will need to add these payments up so that we can compare the total received to the expected amount when we finalize the return.

Here is the link to tax tip 2022-3

https://content.govdelivery.com/accounts/USIRS/bulletins/3040d88?reqfrom=share
https://finance.yahoo.com/news/why-line-tax-preparer-now-225100079.html

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