MADISON (WKOW) — Tax season is upon us, and experts want to make sure taxpayers are well aware of potential complications that could arise when filing.
Sara Maslar-Donar spoke with Christopher Miller, spokesperson for the IRS in Wisconsin on 27 News at 5 Friday.
Sara Maslar-Donar: So it’s an unusual year because many people have received a third stimulus payment, and many people are also receiving child advance payments on their tax credit. So what impact will this have on their taxes?
Christopher Miller: One of the most important things to remember is to keep those letters you receive from the IRS, they will give you the total amount of the third economic impact payment or stimulus payment, and the amount of your advanced credit payments child tax. And this is going to be very important for filing an accurate tax return because you need to put this information on your tax return. So it will help you if you need an extra stimulus payment or the remaining amount of your child tax credit. It is therefore important to keep these letters handy.
Sarah: So some people are a bit worried that child tax credit advance payments will reduce their refund, is that something they should know?
Miller: Well, actually, the child tax credit amount for 2021 is bigger than previous years. So most people get more, you may know the credit is $3,600 for children six and under. But remember, most families got half of that credit up front from July last year, in monthly installments, they’ll get the other half when they file their taxes. 2021. So while some people’s refund check may seem a bit smaller, it’s only because they’ve already received so much of it ahead of time.
Sarah: Are there new salary thresholds for the child tax credit?
Miller: There are new thresholds for the largest credit. So if you’re a married couple earning more than $150,000 in income, the credit starts to taper off and that’s $75,000 for a single person with kids. You will therefore use your 2021 income to calculate your child tax credit on your 2021 tax return.
Sarah: So how can people make sure they get their returns process done in a timely manner and get their money back quickly this year?
Miller: Oh my, make sure you deposit, because e-filing is fast, secure, and accurate. And when you file a return and choose direct deposit, that means your money goes straight from us into your bank account and you get it as soon as possible. When you file and choose direct deposit, we can get your refund to you in less than 21 days as long as there are no other issues with the tax return. So if you can avoid it at all. Do not file on paper as your refund will be delayed especially this year. Electronic filing is the way to go.