The New Normal: Tax Day tips and the pandemic's impact on the process
News 12's Elizabeth Hashagen spoke with Marks Group president and CPA Gene Marks about last-minute Tax Day tips and how the pandemic has impacted the process for some filers.
Marks says anyone worried about not being able to file in time can file for an extension through Form 4868. You will still need to pay any money you owe, but you will have extra time to sort out your papers.
Marks also suggests those who have an IRA or health savings account should max it out on Tax Day if they have not done so already in order to qualify for a deduction.
Filers should check if they qualify for the expanded credit for child and dependent care expenses, often referred to as the child care credit. Families can get a credit for as much as $4,000 for one qualifying person or $8,000 for two or more.
For 2021, it's fully refundable for most filers. That means if the credit exceeds the amount of taxes you owed, the difference is paid as a refund.
Marks says those who aren't sure if they used their child tax credit to its full extent can file for an extension so they have time to go back and look at their purchases.
For 2021 only, more childless workers and couples can qualify for the Earned Income Tax Credit.
The American Rescue Plan Act temporarily increased the maximum credit for the EITC to $1,502, up from $538 for filers without qualifying children who are at least 19 with earned income below $21,430 or $27,380 for spouses filing a joint return.
The expansion also includes a special exception for 18-year-olds who were formerly in foster care or are experiencing homelessness.
Center on Budget and Policy Priorities estimates 17 million people benefit from the EITC expansion, and 11 million are newly eligible.
Marks says this is a credit worth looking into if you think you qualify, and you should file an extension so you have time to do so.
Do people on workers' compensation have to file their taxes? Marks says while this is not taxable income, everyone over 18 years old needs to file a 1040.
How do you make sure you receive the child credit you were eligible for if the IRS has not sent it to you yet? Marks recommends visiting IRS.gov and using the Taxpayer Advocate service to make sure you get anything you are owed.
Starting in 2022, mobile payment providers such as Venmo and PayPal will be required to report to you and the IRS any transactions that you are making with them. Marks says these companies may request tax information from you so they can make this report but to be wary of any fraudulent inquires.