1. Home
  2. News
  3. Finance News
  4. Tax preparation

Tax Preparation

Time is running out for families to apply for Child Tax Credit checks

The IRS says info about 2022 will be sent out early next year

If you’re one of the millions of American families who receive Child Tax Credit checks, there’s another one coming in the mail. But if you’re not signed up and think you qualify, the clock is ticking fast. 

The Internal Revenue Service (IRS) says you have to sign up for the payments on its website by 11:59 p.m. Eastern Time on Monday, Nov. 15 to qualify. Eligible families will receive up to $300 per month for each child under age six and up to $250 per month for each chi...

Not sure how to choose?

Get expert buying tips about Tax Preparation delivered to your inbox.

    By entering your email, you agree to sign up for consumer news, tips and giveaways from ConsumerAffairs. Unsubscribe at any time.

    Thank you, you have successfully subscribed to our newsletter! Enjoy reading our tips and recommendations.

    Recent Articles

    Sort by:

    Expanded tax benefits can help individuals who give to charity during 2020, IRS says

    There are additional forms to fill out, but the upsides are good for itemizers and charitable donors

    While the coronavirus hasn’t given Americans much in the way of something nice, the Internal Revenue Service (IRS) wants taxpayers to know it actually does have something worth checking out.

    Within the Coronavirus Aid, Relief and Economic Security (CARES) Act -- the government legislation that made the first round of stimulus checks possible -- the IRS is offering expanded tax benefits that can help individuals who want to make a charitable donation before 2020 ends.

    Tax changes to lessen some of the economic impact of COVID-19

    The CARES Act includes temporary tax modifications that can lessen at least some of the pain when it comes to paying the 2020 tax bill next year. All told, there are two changes for individual taxpayers:

    New deduction for people who don't itemize. Heading the list is a change that the IRS says nearly 90 percent of taxpayers potentially qualify for. Typically, taxpayers who opt to take the standard deduction can’t claim a deduction for their charitable contributions. However, those individuals can claim a limited deduction on their 2020 federal income tax returns if they make a cash contribution* to a charity and still claim the standard deduction. 

    *Note: A cash contribution includes those made by check, credit, or debit card; or amounts incurred by an individual for unreimbursed out-of-pocket expenses in connection with the individual's volunteer services to a qualifying charitable organization. Cash contributions do not include the value of things like volunteer services or contributions of household items like you would take to an organization like Goodwill.

    The all-important caveat in this deduction says that individuals can claim an "above-the-line" deduction of up to $300 for cash contributions made to “qualifying charities” during 2020. The maximum above-the-line deduction is $150 for married individuals filing separate returns. 

    Itemizers can get as high as a 100 percent limit on cash contributions. Although there are certain limits, taxpayers who itemize have the OK to claim a deduction for charitable contributions if they’re made to qualifying charitable organizations. These limits run from 20-60 percent of an individual's adjusted gross income ("AGI") and vary by the type of contribution and type of charitable organization the money is donated to. 

    Where this change really comes in handy is the clause in the CARES Act that permits individuals to apply for an increased limit, up to 100 percent of their AGI, for qualified contributions. That election is made on a contribution-by-contribution basis and has to be a “cash” contribution made during the calendar year 2020 to a qualifying charitable organization.

    Like any change from the IRS, there are fine points to consider. The agency offers a complete list of those on its website.

    Keep good records

    Despite the upsides of these changes, the IRS reminds taxpayers that there are forms to be filled out and special recordkeeping to provide if a taxpayer wants to claim a charitable contribution deduction. 

    “Usually, this includes obtaining a receipt or acknowledgment letter from the charity before filing a return and retaining a cancelled check or credit card receipt. For donations of property, additional recordkeeping rules may apply, including filing a Form 8283 and obtaining a qualified appraisal,” the IRS says.

    Does this apply to the new round of stimulus checks?

    With Congress preparing to provide another round of stimulus checks, it’s unknown if any of the original CARES Act tax benefits will be expanded upon, but anything’s possible. 

    To keep up-to-date on everything that may impact coronavirus-related tax changes, be sure to check in at IRS.gov/Coronavirus before going headlong into filling out forms and organizing copies of things like charitable contributions.

    While the coronavirus hasn’t given Americans much in the way of something nice, the Internal Revenue Service (IRS) wants taxpayers to know it actually does...
    Read lessRead more

    IRS urges taxpayers to get head start on 2020 tax preparations

    There are a number of changes, so planning in advance can save time and stress

    It’s still 2020 and there’s plenty of time before the next April 15 Tax Day, but the Internal Revenue Service (IRS) is encouraging taxpayers to take necessary actions now to facilitate a timely and accurate filing of federal tax returns in 2021.

    The IRS knows what a crazy year 2020 has been because of the pandemic, and it’s certainly been a part of that craziness due to changing tax deadlines and extensions. Its basic reason for urging taxpayers to move ahead now is that there are several changes in forms that many filers will have to address. 

    The agency says it may also help people discover potentially overlooked deductions or credits.

    Changes to start preparing for

    Unemployment, gig economy, or refund interest income: On top of the standard documents such as Forms W-2 from employers, Forms 1099 from banks and other payers, and records of virtual currencies, the IRS reminds taxpayers that “income” also includes unemployment income, refund interest, and any income from the gig economy. For example, this could include if an unemployed person started driving for Uber to try and keep their lives afloat during the COVID-19 intermission.

    Miscellaneous Income form has changed: Also beginning in 2020, some individuals will receive Form 1099-NEC, Nonemployee Compensation, instead of Form 1099-MISC, Miscellaneous Income, if they performed certain services for and received payments from a business. The IRS suggests that anyone in that position refer to the Instructions for Form 1099-MISC -- for miscellaneous income like from a rental property -- and Form 1099-NEC to ensure they’re filing the appropriate form and are aware of this change.

    The IRS also wants taxpayers who have received substantial amounts of non-wage income like self-employment income, investment income, taxable Social Security benefits, and, in some instances, pension and annuity income to consider making quarterly estimated tax payments. The last payment for 2020 is due on Jan. 15, 2021. Payment options can be found at IRS.gov/payments.

    Stimulus check recipients: Taxpayers may also need Notice 1444, Economic Impact Payment (aka the stimulus check), which shows how much of a payment they received in 2020. The IRS says this particular amount is needed to calculate any Recovery Rebate Credit a taxpayer may be eligible for when they file their federal income tax return in 2021. Conversely, people who didn’t receive an Economic Impact Payment in 2020 may qualify for the Recovery Rebate Credit when they file their 2020 taxes in 2021.

    Did you move during the pandemic? It may come as a surprise to those who hunkered down in their own homes since the coronavirus outbreak, but nearly 16 million people moved according to USPS data. Those taxpayers should update their records to avoid delays in tax return processing.

    Double-check tax ID numbers: Taxpayers with an Individual Tax Identification Number (ITIN) should ensure it hasn’t expired before filing a tax return in 2021. For example, ITINs not used on a federal tax return at least once in the last three years will expire on Dec. 31, 2020. If the ITIN has expired, the IRS recommends taxpayers submit Form W-7, Application for IRS Individual Taxpayer Identification Number, now to renew it. Taxpayers who fail to renew ITINs before filing a tax return next year could face a delayed refund and may be ineligible for certain tax credits.

    Consider having more tax withheld from paychecks: It’s not a mandatory requirement, but the IRS encourages everyone to do a “paycheck checkup” by using its Tax Withholding Estimator. This will help you make sure you have the right amount of tax withheld from your paycheck and, if not, you can adjust accordingly before 2020 ends.

    It’s still 2020 and there’s plenty of time before the next April 15 Tax Day, but the Internal Revenue Service (IRS) is encouraging taxpayers to take necess...
    Read lessRead more