What Tampa, FL, residents need to know about dealing with the IRS during tax season and the “fourth” stimulus checks
Taxpayers will be facing uncommon challenges this year. Job losses have impacted the finances of American taxpayers at an unprecedented rate, with an estimated 9.6 million people between the ages of 15 and 64 having lost their jobs. Economic Impact Payments, more commonly known as stimulus checks, have helped alleviate some of that hardship. A financial advisor can help you navigate how to deal with the latest IRS tax laws regarding your retirement or investments and help you learn more about a possible fourth stimulus check.
If I received an economic stimulus in 2021, how will it affect my tax return?
The third wave of stimulus checks went out in the spring of 2021. If you received a third stimulus check in 2021, you do not have to report it when you file your 2021 tax returns.
However, some taxpayers received another set of relief payments. These payments were intended to help struggling American families with children under the age of 18. Each family was eligible for payments of up to $3,600 per child, and during 2021, many families received advance payments of half of the amount that they were eligible for.
Many people have called this round of child tax credit payments the “fourth” stimulus check, even though only people with dependent children under 18 qualified for this assistance.
Do I need to report my fourth stimulus checks on my tax return?
If you received an advance on the child tax credit payments in 2021, you will need to reconcile this amount with the total amount that your family qualified for. For example, if qualified for a payment of $3,600, and you received a fourth stimulus check payment of $1,800, you can claim a credit for the other $1,800 for which you are eligible.
Some families may find that they have been paid more than they are eligible for. In these cases, the money will need to be repaid.
How will I know how much I am owed, or if I owe?
In late December 2021 through early January 2022, the IRS sent out Letter 6419 to eligible families. That letter detailed how much they have been paid for the “fourth” stimulus checks. It is important not to lose this letter, as you will need it to file your 2021 tax returns.
Talk to a ProVise CFP® professional about your economic stimulus checks and how they may affect your 2021 tax returns
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about your 2021 taxes and what to do about your stimulus checks? Contact ProVise today to schedule a complimentary consultation.