Here are must-know changes for the 2021 tax season

Another year of grappling with coronavirus has led to significant tax law changes for the 2021 season.

From CNBC

While year-end tax planning is always important, recent adjustments — and the possibility of more on the horizon — may offer unique benefits along with potential pitfalls.

Here are some of the biggest changes for individual taxpayers and how to prepare, according to financial experts.
Expanded child tax credit

The American Rescue Plan boosted the child tax credit to $3,000 for families with kids 17 and under for 2021, with an extra $600 for children under age 6.

While millions of Americans have received advanced credits, filers who earned more than expected may need to pay some of it back, experts say.

To qualify for the full credit, single filers need a modified adjusted gross income of less than $75,000 and married couples filing together must earn under $150,000.

Filers should get organized by reconciling their payments, said certified financial planner Larry Harris, director of tax services at Parsec Financial in Asheville, North Carolina.

Recipients may tally advanced credits by comparing bank statements to IRS records in the Child Tax Credit Update Portal. And they may receive a letter in January summarizing payments.

After that, filers can try to estimate 2021 adjusted gross income to see if they still qualify for the payments they received.

However, if there are missing credits, Harris suggests starting the filing process early as many taxpayers had 2020 refund delays related to stimulus payments.

“Get your return filed as quickly as possible,” he said. “That will at least get the wheels turning on what could possibly be another slow year for IRS processing.”....more: Click for Details