NAS Advisors LLC
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NAS Advisors LLC is a consulting firm based in Virginia, USA and provides accounting, bookkeeping, and tax services to individuals, small businesses, non-profits organizations, and international organizations.
NAS Advisors LLC wishes you all a Happy New Year 2024.
Last night, it was our honor to be a Co-Host for 2Gether International (2GI) to celebrate the progress and achievements in the disability entrepreneurship sector. It is our pleasure working with great people like Diego Mariscal, Founder, CEO & Chief Disabled Officer of 2GI.
The tax year 2023 Standard Deduction described below generally applies to tax returns filed in 2024.
The standard deduction for married couples filing jointly, rises to $27,700, up $1,800 from the prior year.
The standard deduction for single taxpayers and married individuals filing separately, rises to $13,850, up $900 compared to the prior year.
The standard deduction for heads of households will be $20,800, up $1,400 from the amount for tax year 2022.
2023 Tax Brackets:
37% for incomes over $578,125 ($693,750 for married couples filing jointly).
35% for incomes over $231,250 ($462,500 for married couples filing jointly);
32% for incomes over $182,100 ($364,200 for married couples filing jointly);
24% for incomes over $95,375 ($190,750 for married couples filing jointly);
22% for incomes over $44,725 ($89,450 for married couples filing jointly);
12% for incomes over $11,000 ($22,000 for married couples filing jointly).
10% for incomes of single individuals with incomes of $11,000 or less ($22,000 for married couples filing jointly).
For more information, you can reach out to one of our tax specialists by calling 540-300-8592 or email to [email protected].
The Internal Revenue Service today announced Monday, January 23, 2023, as the beginning of the nation's 2023 tax season when the agency will begin accepting and processing 2022 tax year returns.
Credits for New Electric Vehicles Purchased in 2022 or Before!
If you bought a new, qualified plug-in electric vehicle (EV) in 2022 or before, you may be eligible for a clean vehicle tax credit up to $7,500 under Internal Revenue Code Section 30D.
The credit equals:
• $2,917 for a vehicle with a battery capacity of at least 5 kilowatt hours (kWh)
• Plus $417 for each kWh of capacity over 5 kWh
The maximum credit is $7,500. It is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.
You may qualify for credit up to $7,500 for buying a qualified new car or light truck. The credit is available to individuals and businesses.
To qualify, you must buy the vehicle:
• For your own use, not for resale
• For use primarily in the U.S.
Qualified Vehicles: To qualify, a vehicle must:
• Have an external charging source.
• Have a gross vehicle weight rating of less than 14,000 pounds.
• Be made by a manufacturer that hasn't sold more than 200,000 EVs in the U.S.
Happy New Year!
Thank you for your support in 2022 and may 2023 be full of great accomplishments. Our team wishes you a joyful year that will be full of new achievements and success.
NAS Advisors team is a long-standing member of the Afghan community and is delighted to be a sponsor for the Afghan Day event.
Taxation Services For Non-Profit Organizations (990).
NAS Advisors help non-profit organizations with filing their taxes include federal and state tax returns. We are here to serve our customers and clients all year-round to provide the tax know-how they need.
Please contact our service line to get more information.
Email: [email protected]
Address: 44330 Mercure Circle, Suite 250C, Dulles, VA 20166
NAS Advisors LLC NAS Advisors LLC is a consulting firm based in Virginia, USA and provides accounting, bookkeeping, a
Hello dear community members,
The Internal Revenue Service (IRS) started accepting and processing 2021 tax returns Monday, Jan. 24, 17 days earlier than last tax season’s late start of Feb. 12. This year, it's essential that parents brush up on some new requirements involving the advance child tax credit and make sure you have the correct facts and figures to file an accurate return. Plugin the wrong number, and you are going to face ungodly delays.
The filing deadline remains months away, but it's never too early to gather your paperwork, focus on some of your tax challenges and prepare to get the job done.
NAS Advisors Tax Professionals are ready to serve clients and customers to file their 2021 tax returns.
Why do you file your tax returns with NAS Advisors?
-100% Accuracy Guaranteed
-Maximize Your Refund & Minimize Your Taxes
-Answer All Your Tax Questions Around The Year
Please contact by one of the following options to schedule your appointment.
Email: [email protected]
Address: 44330 Mercure Circle,
Suite 250C Dulles, VA 20166
NAS Advisors LLC is in partnership with Afghan American Chamber of Commerce to launch a Zoom Conference on Overview of Business and Tax Requirements in the United States.
Save the date: January 27, 2022, at 8:30 AM, EST
Please contact us to register you for this free Zoom Meeting:
[email protected], www.nasadvisors.com, +1-540-300-8592
Address: 44330 Mercure Circle, Suite 250C, Dulles, VA 2016
Tax Rates and Brackets!
The tax brackets set by the IRS are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. This means that the highest earners fall into the 37% range while those who earn the least are in the 10% bracket.
The tax rates and brackets for 2021 and 2022 are provided in the following two charts for your information.
The Internal Revenue Service announced that the nation's tax season will start on Monday, January 24, 2022, when the tax agency will begin accepting and processing 2021 tax year returns.
The January 24 start date for individual tax return filers allows the IRS time to perform programming and testing that is critical to ensuring IRS systems run smoothly. Updated programming helps ensure that eligible people can claim the proper amount of the Child Tax Credit after comparing their 2021 advance credits and claim any remaining stimulus money as a Recovery Rebate Credit when they file their 2021 tax return.
"Planning for the nation's filing season process is a massive undertaking, and IRS teams have been working non-stop these past several months to prepare," said IRS Commissioner Chuck Rettig. "The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don't face processing delays. Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year. And we urge extra attention to those who received an Economic Impact Payment or an advance Child Tax Credit last year. People should make sure they report the correct amount on their tax return to avoid delays."
The IRS encourages everyone to have all the information they need in hand to make sure they file a complete and accurate return. Having an accurate tax return can avoid processing delays, refund delays and later IRS notices. This is especially important for people who received advance Child Tax Credit payments or Economic Impact Payments (American Rescue Plan stimulus payments) in 2021; they will need the amounts of these payments when preparing their tax return. The IRS is mailing special letters to recipients, and they can also check amounts received on IRS.gov.
Like last year, there will be individuals filing tax returns who, even though they are not required to file, need to file a 2021 return to claim a Recovery Rebate Credit to receive the tax credit from the 2021 stimulus payments or reconcile advance payments of the Child Tax Credit. People who don't normally file also could receive other credits.
April 18 tax filing deadline for most
The filing deadline to submit 2021 tax returns or an extension to file and pay tax owed is Monday, April 18, 2022, for most taxpayers. By law, Washington, D.C., holidays impact tax deadlines for everyone in the same way federal holidays do. The due date is April 18, instead of April 15, because of the Emancipation Day holiday in the District of Columbia for everyone except taxpayers who live in Maine or Massachusetts. Taxpayers in Maine or Massachusetts have until April 19, 2022, to file their returns due to the Patriots' Day holiday in those states. Taxpayers requesting an extension will have until Monday, October 17, 2022, to file.
Awaiting processing of previous tax returns? People can still file 2021 returns
Rettig noted that IRS employees continue to work hard on critical areas affected by the pandemic, including processing of tax returns from last year and record levels of phone calls coming in.
"In many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, for IRS employees and for me," Rettig said. "IRS employees want to do more, and we will continue in 2022 to do everything possible with the resources available to us. And we will continue to look for ways to improve. We want to deliver as much as possible while also protecting the health and safety of our employees and taxpayers. Additional resources are essential to helping our employees do more in 2022 – and beyond."
The IRS continues to reduce the inventory of prior-year individual tax returns that have not been fully processed. As of December 3, 2021, the IRS has processed nearly 169 million tax returns. All paper and electronic individual 2020 refund returns received prior to April 2021 have been processed if the return had no errors or did not require further review.
Taxpayers generally will not need to wait for their 2020 return to be fully processed to file their 2021 tax returns and can file when they are ready.
Key information to help taxpayers
The IRS encourages people to use online resources before calling. Last filing season, as a result of COVID-era tax changes and broader pandemic challenges, the IRS phone systems received more than 145 million calls from January 1 – May 17, more than four times more calls than in an average year. In addition to IRS.gov, the IRS has a variety of other free options available to help taxpayers, ranging from free assistance at Volunteer Income Tax Assistance and Tax Counseling for the Elderly locations across the country to the availability of the IRS Free File program.
"Our phone volumes continue to remain at record-setting levels," Rettig said. "We urge people to check IRS.gov and establish an online account to help them access information more quickly. We have invested in developing new online capacities to make this a quick and easy way for taxpayers to get the information they need."
Last year's average tax refund was more than $2,800. More than 160 million individual tax returns for the 2021 tax year are expected to be filed, with the vast majority of those coming before the traditional April tax deadline.
Overall, the IRS anticipates most taxpayers will receive their refund within 21 days of when they file electronically if they choose direct deposit and there are no issues with their tax return. The IRS urges taxpayers and tax professionals to file electronically. To avoid delays in processing, people should avoid filing paper returns wherever possible.
By law, the IRS cannot issue a refund involving the Earned Income Tax Credit or Additional Child Tax Credit before mid-February, though eligible people may file their returns beginning on January 24. The law provides this additional time to help the IRS stop fraudulent refunds from being issued.
Some returns, filed electronically or on paper, may need manual review, which delays the processing, if our systems detect a possible error or missing information, or there is suspected identity theft or fraud. Some of these situations require us to correspond with taxpayers, but some do not. This work does require special handling by an IRS employee so, in these instances, it may take the IRS more than the normal 21 days to issue any related refund. In those cases where IRS is able to correct the return without corresponding, the IRS will send an explanation to the taxpayer.
File electronically and choose direct deposit
To speed refunds, the IRS urges taxpayers to file electronically with direct deposit information as soon as they have everything they need to file an accurate return. If the return includes errors or is incomplete, it may require further review that may slow the tax refund. Having all information available when preparing the 2021 tax return can reduce errors and avoid delays in processing.
Most individual taxpayers file IRS Form 1040 or Form 1040-SR once they receive Forms W-2 and other earnings information from their employers, issuers like state agencies and payers. The IRS has incorporated recent changes to the tax laws into the forms and instructions and shared the updates with its partners who develop the software used by individuals and tax professionals to prepare and file their returns. Forms 1040 and 1040-SR and the associated instructions are available now on IRS.gov. For the latest IRS forms and instructions, visit the IRS website at IRS.gov/forms.
Free File available January 14
IRS Free File will open January 14 when participating providers will accept completed returns and hold them until they can be filed electronically with the IRS. Many commercial tax preparation software companies and tax professionals will also be accepting and preparing tax returns before January 24 to submit the returns when the IRS systems open.
The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds – as well having all the information they need to file an accurate return to avoid delays. The IRS's Free File program allows taxpayers who made $73,000 or less in 2021 to file their taxes electronically for free using software provided by commercial tax filing companies. More information will be available on Free File later this week.
In addition to IRS Free File, the IRS's Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs free basic tax return preparation to qualified individuals.
Watch for IRS letters about advance Child Tax Credit payments and third Economic Impact Payments
The IRS started sending Letter 6419, 2021 advance Child Tax Credit, in late December 2021 and continues to do so into January. The letter contains important information that can help ensure the return is accurate. People who received the advance CTC payments can also check the amount of the payments they received by using the CTC Update Portal available on IRS.gov.
Eligible taxpayers who received advance Child Tax Credit payments should file a 2021 tax return to receive the second half of the credit. Eligible taxpayers who did not receive advance Child Tax Credit payments can claim the full credit by filing a tax return.
The IRS will begin issuing Letter 6475, Your Third Economic Impact Payment, to individuals who received a third payment in 2021 in late January. While most eligible people already received their stimulus payments, this letter will help individuals determine if they are eligible to claim the Recovery Rebate Credit for missing stimulus payments. If so, they must file a 2021 tax return to claim their remaining stimulus amount. People can also use IRS online account to view their Economic Impact Payment amounts.
Both letters include important information that can help people file an accurate 2021 tax return. If the return includes errors or is incomplete, it may require further review while the IRS corrects the error, which may slow the tax refund. Using this information when preparing a tax return electronically can reduce errors and avoid delays in processing.
The fastest way for eligible individuals to get their 2021 tax refund that will include their allowable Child Tax Credit and Recovery Rebate Credit is by filing electronically and choosing direct deposit.
Tips to make filing easier
To avoid processing delays and speed refunds, the IRS urges people to follow these steps:
Organize and gather 2021 tax records including Social Security numbers, Individual Taxpayer Identification Numbers, Adoption Taxpayer Identification Numbers, and this year's Identity Protection Personal Identification Numbers valid for calendar year 2022.
Check IRS.gov for the latest tax information, including the latest on reconciling advance payments of the Child Tax Credit or claiming a Recovery Rebate Credit for missing stimulus payments. There is no need to call.
Set up or log in securely at IRS.gov/account to access personal tax account information including balance, payments, and tax records including adjusted gross income.
Make final estimated tax payments for 2021 by Tuesday, January 18, 2022, to help avoid a tax-time bill and possible penalties.
Individuals can use a bank account, prepaid debit card or mobile app to use direct deposit and will need to provide routing and account numbers. Learn how to open an account at an FDIC-Insured bank or through the National Credit Union Locator Tool.
File a complete and accurate return electronically when ready and choose direct deposit for the quickest refund.
Key filing season dates
There are several important dates taxpayers should keep in mind for this year's filing season:
January 14: IRS Free File opens. Taxpayers can begin filing returns through IRS Free File partners; tax returns will be transmitted to the IRS starting January 24. Tax software companies also are accepting tax filings in advance.
January 18: Due date for tax year 2021 fourth quarter estimated tax payment.
January 24: IRS begins 2022 tax season. Individual 2021 tax returns begin being accepted and processing begins
January 28: Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify.
April 18: Due date to file 2021 tax return or request extension and pay tax owed due to Emancipation Day holiday in Washington, D.C., even for those who live outside the area.
April 19: Due date to file 2021 tax return or request extension and pay tax owed for those who live in MA or ME due to Patriots' Day holiday
October 17: Due date to file for those requesting an extension on their 2021 tax returns.
Your Online Account | Internal Revenue Service Get instructions on your online account. Review the amount you owe, balance for each tax year and payment history.
The Internal Revenue Service issued the 2022 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on January 1, 2022, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
58.5 cents per mile driven for business use, up 2.5 cents from the rate for 2021, 18 cents per mile driven for medical, or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from the rate for 2021 and 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2021.
The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
Taxpayers can use the standard mileage rate but must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.
Notice 22-03 PDF, contains the optional 2022 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. In addition, the notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2022 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.
Your business earned and spent money in 2021.
How did you keep track of your income and expenses?
NAS Advisors team is available to prepare your businesses’ tax returns expertly, no matter how complex.
Email: [email protected]
Address: 44330 Mercure Circle, Suite 250C
Dulles, VA 20166
Thank you for your association; Happy New Year (2022), and we wish you good luck, prosperity, and health. We look forward to continuing to serve you in 2022.
Whether your business needs a new accounting system for the next year or a year-end review of your financials, NAS Advisors is here to assist you with a smooth transition to your next financial year.
Accounting System Setup – NAS Advisors LLC For our client, we recommend setting up their accounting system in QuickBooks by Intuit. QuickBooks allow you to easily record your income and expenses, track your cash and bank accounts, create invoices, track receivables and payables, and obtain various financial reports instantly. They can also e...
Chlid tax credit portals online soon: IRS will let you update family info and opt out of monthly checks
Advance monthly payments for the child tax credit start arriving July 15. Families will be able to go online before then to inform the IRS of household changes.
Families eligible for this year's enhanced child tax credit will get access to some useful IRS tools before July 1. Two portals will allow them to opt out of the monthly child tax credit payments as well as update key information like marital status, change in income and number or ages of children. If you're curious how much your family will get when the checks roll out on July 15, use CNET's child tax credit calculator.
The IRS is also sending out letters to the 36 million families who may qualify for a payment of up to $3,000 for each child aged 6 to 17, or $3,600 for children under 6. By using the upcoming online portals, parents can decide if they'd like to receive half of that money through advance monthly installments this year ($300 or $250 per child per month) or if they'd like to defer the total amount to 2022.
We will be updating this story as the IRS releases more information, but here's what we know about the child tax credit letter you may have received. We can also suggest some ways to use your child tax credit checks, give you details on how you might receive your payment and tell you how to claim thousands of dollars back for child care expenses.
What are the coming online child tax credit portals for?
Here are how the IRS portals coming in the next few weeks will help parents with eligible dependents:
One portal will help you determine whether you qualify for the advance child tax credit payments.
The second online tool -- which the IRS is calling the "Child Tax Credit Update Portal" -- will let you opt of of the advance payments to instead receive one payment in 2022. Later this year, the IRS said, this portal will allow you to check on the status of you payments and update the IRS with your current information. Those who don't typically file tax returns can also use this portal to update the IRS with their status -- including changes to the number of dependents, filing status or income -- so they can receive the correct payment amount they qualify for.
When will the IRS open child tax credit portals?
The IRS has set an open deadline of July 1, though we don't have an exact date yet -- the portals could be up and running sooner than that. The IRS is simultaneously processing tens of millions of tax returns, which may affect the timeline while it organizes the child tax credit program.
How can the portals be used to opt out of receiving monthly payments?
The main portal will let you opt out of receiving the monthly child tax credit payments. What does that mean? It means that instead of receiving monthly payments of, say, $300 for your 4-year-old, you can wait until you file your 2021 taxes in 2022 to receive the $3,600 lump sum.
You may also want to opt out because you're expecting your circumstances to change and don't want to update your information in the portal.
How can the portals help those parents who don't file taxes?
The IRS will open a second portal dedicated to people who don't typically file their income taxes. This child tax credit portal will allow this group to give the IRS their updated information, including the number and ages of their qualifying child dependents.
The portal is expected to let tax nonfilers submit a simplified electronic form to the IRS to secure their eligibility. This group would include people who don't have bank accounts, as well as the homeless population.
What else is there to know about the child tax credit portals?
Taxpayer families will be able to make changes to any life circumstances since they last filed their taxes, such as an income change and child custody status. For example, if you started making less money this year, you'll want to update the IRS about those changes so you can get the correct child tax credit amount.
If you had or will have a new baby this year, it's important to let the IRS know, so you can receive your payment for up to $3,600 for that child. The same applies if you adopted a child or if you gained a new child dependent since you last filed your taxes.
Also, if you've gained full custody of your child, you'll be the parent who receives the money for your kid. Note that parents who have shared custody will not each get a payment. This is important for domestic violence survivors, according to comments during an IRS oversight hearing by Nina Olson, executive director of the Center for Taxpayer Rights. "That change of circumstances portal should allow them to enter their change in marital status and also where the children are."
What about families without a permanent address?
The IRS is urging people to share information about the child tax credit with those who don't have permanent addresses. By doing this, you're helping make sure families receive the payments they're eligible for. You can share information about the online portals with them so they know about the programs to help them file a tax return.
What details are still unavailable?
There are many details that are still unclear about the IRS' child tax credit portals, including:
The exact date the portals will be available to families.
How the portals will work for families updating their personal details or whether they can update their bank information.
How families will differentiate between the two portals.
The process for opting out of the monthly payments.
For more child tax credit 2021 details, here's how much money you can expect. Also, here's what it takes for you and your dependents to qualify for the payments.
Psst, parents! The IRS is sending letters about your child tax credit money
Millions of families will receive a notice about monthly child tax credit payments, which start in July. Here's what it means.
An unexpected letter from the IRS usually sparks panic, as it did for one colleague who thought the envelope was an audit notice. But if your household received a letter from the tax agency this week (or if you get one next week), it should bring a sigh of relief. It's about the new child tax credit for 2021 and how you may qualify to start receiving advance monthly payments on July 15. The same letter was sent to 36 million households across the US.
As many as 92% of families with children -- that's 65.6 million kids -- could qualify for the payments. New rules this year will boost the annual child tax credit from $2,000 to a maximum of $3,600 per child. Also, unlike previous years, half of the total amount for the payment will be distributed automatically in advance partial payments through the end of 2021. (Parents will also have the option of deferring the monthly installments to receive the lump sum when filing taxes next year.)
We'll explain what the letter will and won't tell you, and why you should keep a lookout for a second letter from the IRS about your child tax credit checks. (We'll also walk you through what to do if you don't get a letter.) You can also use CNET's child tax credit calculator to estimate your payments and read more about how to spend your child tax credit money.
Then what is the second IRS letter for?
If you do, in fact, get the go-ahead from the IRS to receive child tax credit payments (which start July 15) you'll be treated to a second letter that confirms your eligibility. It also ballparks how much money you should expect to see in those checks.
The 2021 child tax credit payment schedule gets a little complicated from here, but the upshot is that half the total money will arrive in increments from July through December, with the remaining money coming your way after you file taxes in 2022.
You'll want to keep this letter so you can compare the estimate with what you eventually receive and to make sure you get the right amount for the right number of children you claim. In case there's a problem with child tax credit check delivery, this letter is almost like your receipt from the IRS, which you may need to reference in the future (like in a recovery claim on your 2021 taxes next year).
What to do if you don't get a letter from the IRS
If a letter never shows up in your mailbox, that doesn't necessarily mean the IRS is skipping you over for the child tax credit payments. After all, the vast majority of US households with children will receive some portion of the money earmarked for parents.
For example, while 36 million families are intended to get a letter, up to 39 million households could qualify for the credit. That means off the bat, 3 million households could see a check, but no confirmation letter.
You might not get a letter if the IRS:
Doesn't have enough information on hand to determine if you and your family are eligible.
Doesn't have your current mailing address.
Flags an issue with shared custody.
Thinks you or your children don't meet the qualifications.
What you can do now:
If you're normally not required to file taxes -- someone the IRS calls a nonfiler -- you'll have a chance to update your details, like the number of children you can claim, using an online portal. It's slated to open by July 1.
If you moved, make sure the IRS and the US Postal Service have your current mailing address.
Make sure you know the eligibility and income rules for parents and their kids, including shared custody situations.
For more information about the child tax credit, here's how you'll use the two online IRS portals launching by the start of July and what happens if you have a baby this year.
Child tax credit payments start July 15: What to know about the $300 or $250 monthly checks
The new child tax credit for 2021 could give your family up to $3,600 per child. We'll explain how and when you'll receive payments.
Families across the US started receiving letters from the IRS about the 2021 expanded child tax credit. Some 36 million families will soon have more details about upcoming payment schedules and amounts. Household that didn't receive the IRS letter may still be eligible to receive the payments, totaling up to $3,600 per kid. Check to see if your dependents qualify and use CNET's child tax credit calculator to estimate your amount.
Here's a summary: Roughly 90% of households with kids in the US are slated to begin receiving monthly checks this year without any action required. That means on July 15, families with qualifying children could get up to $300 per month per dependent under age 6 (or up to $250 per month for older dependents). Half the credit will arrive via monthly payments between July and the end of 2021, and the other half will be included in your tax refund after you file next spring.
The IRS will open two web portals in the next few weeks where parents will be able to opt out of monthly payments or update their personal details like income or number of dependents. We'll explain what to do if you normally don't file a tax return or if you share child custody. You might also want to know how to claim up to $16,000 in child care expenses and how you will be receiving your payments. This story has been updated.
Payment schedule for the expanded child tax credit
The first child tax credit check will arrive July 15 and is automatic for those households that qualify. The first six payments totaling half the credit will arrive monthly, targeting the same day of the month -- though you may not receive the payment on the exact same day every month, especially if you get a paper check instead of a direct deposit payment.
For Aug. 15, which is a Sunday, the IRS said the payment will go out Aug. 13. The checks will end in December, with the remainder of the credit coming next year after taxes. Here's a rough schedule:
Information for families that don't normally file taxes
Payments will be automatic for those who filed their 2020 tax returns by the May 17 deadline, so nonfilers will need to file a simple one-time tax return to get their money, even if they're not usually required to file. This will let the IRS know your income and how many dependents are in your household who count toward the child tax credit benefits. Those taxpayers who did meet the deadline shouldn't file an amended return related to the new legislation.
If you don't file a tax return, you may not get the full monthly child tax credit payment you're owed, at least not right away. The IRS said you will be able to update your income and dependent status so the agency is using your most recent info when calculating payments. One of the upcoming IRS portals will be designed for people who don't usually file taxes.
How this year's child tax credit is different from last year
The first thing to know is you won't get your child tax credit payments all at once in 2021. The credit part means the amount you owe on your 2021 taxes (which you file in 2022) will be reduced by the "credit" you gain from your eligible dependents. That could either reduce the amount you owe the IRS or else increase your tax refund. The idea is to bring you money sooner, which is why the checks will start coming in 2021 as "advance payments."
This logic also explains why your 2021 child tax credit is split into two parts. The first half in 2021 will come as advance monthly installments you can start using right away. The second half will apply to your 2021 taxes next year.
Age qualifications for dependents
How the payments will be divided between 2021 and 2022 might be confusing. For each qualifying child age 5 and younger, up to $1,800 (half the total) will come in six $300 monthly payments this year. For each kid between the ages of 6 and 17, up to $1,500 will come as $250 monthly payments six times this year. The IRS bases your child's eligibility on their age on Dec. 31, 2021, so five-year-old children turning six in 2021 will qualify for a maximum of $250 per month. For both age groups, the rest of the payment will come with your 2021 tax refund when you claim the remainder of the tax credit in 2022. Here's how to calculate your family's total child tax credit amount, including a monthly breakdown.
If your dependents are 18 years old, they can qualify for $500 each. Dependents between the ages of 19 and 24 may qualify as well, but they must be enrolled in college full-time. Here's more on the financial breakdown for qualified dependents.
Families expecting a new baby or adopting a child this year
If you have a baby in 2021, your newborn will count toward the child tax credit payment of $3,600. Children who are adopted can also qualify if they're US citizens.
Parents with shared custody
For the first two stimulus checks, some parents who shared custody of a child but weren't married to each other were entitled to each claim money for the same child. That was only if they alternated years for claiming the dependent -- in other words, if one parent claimed the child on their taxes in odd years and the other claimed the child on their taxes in even years.
This is no longer allowed for the third check, and we're told it won't work that way for the child tax credit payments either. Here's what we know so far about the child tax credit and shared custody situations.
Deferring partial monthly payments
You aren't obligated to receive monthly child tax credit payments this year. Instead, you can choose to get one payment in 2022 (the upcoming IRS portals will allow you to do so). You may want to opt out if you'd rather have one large payment for a projected expense next year, or if you're concerned the IRS might overpay you this year and you don't want to be saddled later with an outstanding debt.
Child tax credit web portal access
The IRS will launch two online portals by July 1. One portal is for people not normally required to file an income tax return, which will allow nonfilers to provide their information to receive payments. The second portal will allow families to update their information if their circumstances have changed, for example, if a new child arrives in 2021 who isn't reflected on your 2020 tax return.
The portals can also allow families to opt out of the monthly payments if they prefer to receive one big payout when they file taxes in 2022.
Income thresholds for parents
Income limits do determine how much you will receive and if you even qualify, though there is no limit on the number of children you can receive credit for as long as you're eligible. The amount you'll get will phase out for people with higher incomes: singles earning more than $75,000 per year, heads of household earning more than $112,500 per year and married couples earning more than $150,000 a year. Your child tax credit payments will begin to phase out by $50 for every $1,000 of income over those threshold amounts, according to Joanna Powell, managing director and certified financial planner at CBIZ.
Child tax credit payments by mail or direct deposit
The way your child tax credit money arrives could very well depend on how you receive your stimulus check money. Most people will receive child tax payments by direct deposit, but the IRS will also send paper checks and funds on debit cards.
For stimulus checks, people who received Social Security benefits like SSI or SSDI got $1,400 payments on a Direct Express card. Veterans who don't normally pay taxes might also have a different delivery method. We'll update this when we have more information about the kind of debit cards you may receive.
If the IRS sends a check for a larger amount
You will have to return any overpaid amount to the IRS. The child tax credit rules aren't as flexible as the stimulus check rules. When you file your 2021 tax return (in 2022), if your tax situation isn't what the IRS has in its system and you weren't entitled to as much as you received, you'll have to give the overpayment back. One example of this happening is if you and the other parent of your child (who is not your spouse) are both paid for the child tax credit for the same dependent.
To avoid this tax inconvenience, make sure all your information is updated before the payments start arriving. The future portal will allow you to make adjustments.
What to expect after the last payment in 2021
The last advance payment of the child tax credit is scheduled to go out by Dec. 31, with the rest coming in 2022 with tax season. But President Joe Biden stated that the higher payments may last until at least 2025. He presented his American Families Plan proposal to extend the payments, stating in an April 28 speech: "Together, let's extend the Child Tax Credit at least through the end of 2025." It's up to Congress to approve his request.
For more information, here are the top things to know about the $3,600 child tax credit. Plus, here's how to track your tax refund and how to track your stimulus check.
Why are people opting out of the child tax credit monthly payments?
Monthly $300 checks are going out starting July 15, but many families will opt to receive a lump sum instead.
Families with eligible dependents will begin receiving the first child tax credit payments on July 15. Half the total will arrive via monthly checks through the end of the year, with the other half bundled with your tax return next spring. If you qualify for the full tax credit (use CNET's calculator to estimate your payments), you'll receive $300 per month per dependent under 6, and $250 a month for each older dependent, with another $1,800 (or $1,500) at tax time. (Here are three ways to know if you could qualify.)
Some families, however, may opt out of the child tax credit, choosing instead to receive one lump sum -- up to $3,600 or $3,000 -- with their tax return instead of monthly checks. There are a number of good reasons to defer payment, for instance, if your income or number of dependents will change during 2021 and you don't want the hassle of extra paperwork. To opt out, you'll have to use one of the IRS child tax credit portals, which should be live by July 1.
Read on to learn more about why you may want to consider opting out -- and how to do so before July 15. And in the meantime, here's how you can claim up to $16,000 in child care expenses as a tax break next year, and some ideas for the best ways to spend your child tax credit money when it comes. Plus, here's what we know about the new stimulus plans and how they might bring you more money. This story gets frequent updates.
Why would parents opt out of advance child tax credit payments?
Here are some reasons why unenrolling from the monthly child tax credit payments may be a good idea:
You'd rather have one large payment next year instead of seven smaller payments spanning 2021 and 2022. This could be the case for families saving up for a big expense or those who have budgeted for that money to pay off outstanding debt.
You know your household circumstances or tax situation will change and don't want to deal with having to update your information in the portal.
You're concerned the IRS might accidentally send you an overpayment, and you don't want to worry about paying that money back next year.
What is the payment schedule for those who opt out?
Those who choose to decline this year's child tax credit installments (amounting to half the total) will still receive the same amount of money in the end, but are simply delaying when they receive it.
Be aware that if you unenroll from getting the monthly child tax credits from July through December, you won't get your full payment -- or any payment at all -- until after the IRS processes your 2021 tax return next year. The total amount will then arrive with your tax refund, or could be used to offset any taxes you owe at that time; you'll be in a similar situation to those people who had to claim missing stimulus checks on their taxes this year.
So if you have a child who's 5 years old or younger by the end of 2021 and your income meets the requirements, you'll get $3,600 total when you file your taxes in 2022. However, if you choose to receive monthly payments, you'd get six installments of $300 payments each month this year and another $1,800 with your tax refund next year. You can use our child tax credit 2021 calculator to estimate how much you should get.
How will the IRS portals help set up a single annual payment next year?
If you filed your taxes before the May 17 deadline, then you'll automatically receive the advance monthly payments starting July 15. But before next month, the IRS will open two portals designed specifically for the new child tax credit payments, with one of them available to households who wish to opt out of this year's monthly installments.
We'll know more about the details once the portals are up and running, and the IRS should have more resources to build the portals with tax season coming to an end. We do know the IRS will have paper forms available for those who don't have internet access. "We will make forms and instructions available for folks who want to opt out," IRS Commissioner Charles Rettig said April 13.
We also know the portals can be used to update the IRS with any changes that have happened since you last filed your taxes. For example, if you had a new baby in 2021, gained a new qualified dependent or if your income changed recently, the IRS wouldn't have that on file yet.
For more child tax credit information, here's what you need to know if you share custody of a child. Also, here's what to know about the child tax credit payment timeline and the extra thing parents of 2021 babies will need to do to claim their payments.
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