Keep Calm and be Prepared for Tax Season
Tips and tricks for stress-free filing!
Tax season is officially here! And with that, you’re officially freaking out. Don’t let your worry, stress, or organizational skills (or lack thereof) keep you from getting started early. From getting that big tax return to navigating pandemic-related tax relief, let Rock Valley Credit Union help guide the way with answers to your FAQs, and tips and tricks to make this tax season less of a headache!
Wait, when do my taxes have to be done?
April 18, 2022 is the deadline to file your 2021 taxes. If you need an extension, you can apply for one, which will move your deadline to October.
Hurry up! I don't have time for this. What do I need to know about this year's tax laws?
- There’s no punishment for student loan help. (In the past, student loan forgiveness was considered a taxable income.)
- Required minimum distributions are back. If you reach a certain age, you MUST start withdrawing money annually from IRAs and 401(k)s.
- There are updated income brackets.
- You can get a $300 charitable deduction, even if you don’t itemize.
- There’s a boosted child tax credit.
I'm super confused about the child tax credits. Can you break them down for me?
Ok, so if you were eligible for a child tax credit, the government may have started sending you monthly advanced payments for this credit starting in July 2021. Basically, you’re cashing in on your tax return early as these payments were in advance of 2021’s tax filing.
If you received these monthly payments in 2021, your tax refund might be smaller.
If you’re still confused about what the tax means to you and your family, the IRS launched two tools in 2021 to help you sort all of the information:
- The Child Tax Credit Eligibility Assistant helps you understand if you are eligible for the Advance Child Tax Credit.
- The Child Tax Credit Update Portal allows you to choose to opt out of these monthly advanced payments, update direct deposit information, switch from paper check to direct deposit, and stop payments anytime. You can also update your income here. Click here for more information on how to apply.
Is there an age limit for claiming my child as a dependent?
Even if your grown adult son is still living in your basement, unfortunately the government says you can’t claim him on your taxes.
To claim your child as a dependent, he or she must be either younger than 19 years old or be a “student” younger than 24 years old at the end of the calendar year. There is no age limit if your child has permanent or total disabilities or meets the qualifying relative test.
Meanwhile, maybe ask your “roommate” for help taking out the trash
Should I be worried about tax scams?
Well, yes. The IRS is reminding taxpayers to be aware that criminals will make aggressive calls posing as IRS agents in hopes of stealing taxpayer money or personal information.
Remember these things:
- The IRS might make official and sometimes unannounced visits to discuss taxes owed or returns due, but they will try to contact you through the mail first.
- All IRS reps will provide their official credentials, called a pocket commission and a HSPD-12 card. You have the right to see these credentials.
- IRS employees might call you to set up appointments or to discuss audits, but not without first attempting to notify you by mail.
- The IRS will not demand money on the spot and will discuss payment options with you if you owe money
Can RVCU do my taxes for me?
At Rock Valley Credit Union, we are happy to help you with any step of your financial journey. And when it comes to your most overwhelming hurdles, we’re here to alleviate the headache.
If you need help, contact the Rock Valley Investment Services team. RVIS is made up of a team of investment partners that can help manage your wealth, reduce your tax burden, and refer you to qualified tax specialists. Check out RVIS today!
Any last advice?
Do your taxes early. This helps prevent scammers from targeting you, and it will prevent delays in getting you your valuable tax return.
Speaking of that tax return, we wouldn’t be us without recommending to put those dollars in a savings account so it’s there for a rainy day. Call us at 815-282-0300 or click here to open an account online or to learn more today.