CLAIM FEDERAL STIMILUS $ WHILE IT’S HOT

Believe me, I’ve seen some of the craziest tax claims in my office over the years but claiming captured military equipment hasn’t been one of them. Recently the Ukrainian government assured its people they wouldn’t be held liable for taxation on any Russian tanks or other military equipment they recover.

It seems, even in war, the Ukrainian tax agency communicates faster than the IRS.

And yes, this is “a thing,” as the young people say. The IRS has been moving at EVEN MORE of a snail's pace this year than usual. Hold times are beyond mentioning and the processing of returns is seriously delayed (especially now!).

You know what that means, right?

Janet Behm's
"Real World" Personal Strategy Note
Bank on 2021 Tax Credits For A Bigger Refund
“Dear IRS, I am writing to you to ‘cancel my subscription.’” – Charles Schultz

This time of year, we know two things about people: They don’t like to file tax returns, but they do like to get money back.

There have been a lot of stimulus programs and tax law changes over the last few years, and the fact is there may be a lot of credits and other tax goodies out there just waiting for you to claim them… and they can really fatten up your refund.

Only thing is, to do that you have to file a tax return, which people sometimes don’t want to do if they don’t make enough to mandate it. This year especially, with all the credits out there and many about to expire, that could be a bad move.

Here are some ways to get more of what’s coming to you from the federal government (in a good way).

Give yourself credit
Generally, you can get a tax refund if through the year, paycheck after paycheck, withholding after withholding, you paid in more than you eventually owe. This includes if you pay an estimated tax every quarter, too.

This happens to a lot of people: The IRS issues more than 100 million refunds every year.

“Refundable tax credits” – meaning you can claim them even if you don’t owe any taxes, a pretty sweet setup – have been more popular than ever. You might be able to claim some and not even know it. You might also want to hurry: Some are on the chopping block.

So, what are some of these credits and how can you get them?

Earned Income Tax Credit. The EITC probably comes first to mind when you think of ways to reduce your tax bill or get your money back even if you don’t owe taxes. It gets a lot of press and it’s been a refundable credit for a while now, open to taxpayers with low or moderate-income.

For 2021, the IRS made it available for more taxpayers, too, removing the age limit and increasing how much income you can make and still get the credit. Note: There are special qualifying rules for members of the military or the clergy and for those who get disability payments.

Child Tax Credit. The CTC has been around a while, too, but for 2021 it was bigger and fully refundable. It was also in the news a lot over the last year: You, like a lot of people, probably got big chunks of your CTC in advance over recent months. That was nice at the time, but it does mean that you have less of this credit to take now when you file your taxes. Still, it’s worth checking out.

Child and Dependent Care Credit. You may be able to get credit for some of your costs if you paid for the care of a qualifying individual to enable you (and your spouse if you file a joint return) to work or look for work. The size of the credit depends on your adjusted gross income. And in 2021, it’s also been increased and for the first time is refundable.

American Opportunity Tax Credit. If you’re in higher ed or supporting someone who is, the AOTC is a heck of a credit. You can get a maximum annual credit of twenty-five hundred bucks – and if the credit zeroes out the tax you owe, you can get 40% of any remaining credit (up to a grand) right back in your pocket.

There are income limits, and the student in question must be pursuing a degree or “recognized education credential” and be enrolled at least half-time for at least one academic period, among other conditions. Check IRS.gov to research this.

Premium Tax Credit. Did you know the feds will give you money to help pay for health insurance? It’s true. This refundable credit can help you cover the premiums for insurance you bought through the Health Insurance Marketplace. They’ve expanded the eligibility for 2021 and 2022 – including by giving the green light if you got unemployment. There may be other refundable credits to help you pay for health insurance.

Recovery Rebate Credit. You probably got all the money you’ve got coming in the form of those sweet stimulus checks from the feds (aka Economic Impact Statements) a while back, but if you didn’t, you may be able to cash in on this credit.

Again, these are great credits – but to get them in your pocket, you have to file a tax return.

BE THE ROAR not the echo®

Janet Behm