This tax tip might save you some money and some aggravation. Just about every year, most taxpayers get a refund from the IRS. Usually, about 66% to 75% of taxpayers get money back when they file their tax returns. Many taxpayers bank on that refund. Some consider it to be forced savings. Some use that refund as a rainy day fund. Some look at that refund as money to splurge with.
But this year — the refunds for 2021 might be smaller — and for some taxpayers, there may be no refunds at all. And some taxpayers might have to pay money instead of getting a refund.
And the reason that things might be different is that many Americans received advances on their child tax credits. In some cases, families got tax credits that were too much. And that could mean you owe money on your 2021 returns. Look out for a special letter from the IRS with form 6419. Form 6419 will help you reconcile what you received for Child Tax Credits — and what you’re actually entitled to. Don’t put off reading form 6419. It’s better to tackle any surprises earlier than later.
Some taxpayers received pandemic unemployment assistance. They could raise your tax bill too. PPP forgiveness could mean additional forms you have to file this year.
So here’s the bottom line for your money — get to work on your 2021 taxes earlier than in other years. You don’t want to be surprised at the last minute. And remember, consult with a tax professional if you have a problem or if you have any questions. You might need a tax attorney. You might need a tax defense attorney. You might have to seek tax debt relief. You might even need to seek an offer in compromise and a tax expert can help and advise you on how to lower your tax debt.
Remember, Legal Tax Defense offers a free consultation. Just give us a call today.
Disclaimer: Alan Mendelson is a well-known TV consumer news reporter who reports on tax issues. You should seek professional advice if you have tax questions or issues.