As the saying goes, nothing is certain except for death and taxes.
The filing deadline draws is just two months away.
Self-proclaimed Amber “The Tax Lady” Whitehead wants to remind us of some changes this year, so you can maximize the credits to your full potential.
“Every penny matters. Every dollar matters,” the owner of Whitehead Tax & Financial Services said from her Hartford office.
She says look for a letter in the mail from the IRS with how much you may have received for the Advanced Child Tax Credit and last year’s stimulus payment. You can also look up this information on the IRS website.
If you didn’t get what you were entitled to, that can be reported and refunded.
Whitehead says even if you didn’t work this year, it may be worth filing for a refund too because of the credits that are in place.
And for those who received unemployment, she says there’s no tax break this year.
“Unemployment is always taxable but what they did last year because of the pandemic was they made the first $10,200 not taxable, but this year the whole thing is taxable.”
And if you’ve been dabbling in cryptocurrency, Whitehead warns the IRS will be keeping a close eye on those reportings this year.
“Even if you just exchange cryptocurrency it’s a taxable event. So let’s say you started out with Bitcoin and you swapped it for Shiba, that’s an exchange, and that’s a taxable event that needs to be reported on your tax return.”
If you are hiring help to file, Joleen Simpson, the Special Agent in charge of the IRS Criminal Investigation Division in Boston wants people to beware of unscrupulous tax preparers.
“Many times taxpayers fall victim to the promise of an incredibly large refund,” Simpson said.
“Here in the New England area, we see it every year where they put false deductions or line items on the tax return, the majority of the time without the tax preparer's knowledge,” she said.
Simpson reminds people that you are responsible for what’s listed on your return, so check out the IRS website to find a list of legitimate tax preparers in your neck of the woods.
“We always suggest that you look for a preparer who is available year-round,” Simpson said.
And remember that IRS backlog? It still exists, so e-file if possible.
“You do not want to mail in your returns this year. Try to avoid it at all costs because if you were to mail in the return it probably won’t get looked at until the end of the year because of the backlog,” said Whitehead.