It’s summer, summer, summertime, which means you probably care more about hitting the beach than doing anything tax related. But a little planning now can help you save money when you file next year. Here’s what you need to know.
Newly married couples must report name changes to SSA
It’s wedding season! If you’re one of the lucky couples saying “I do” this summer, there’s something important you need to remember (other than your vows). All name changes must be reported to the Social Security Administration. If you fail to do so, your tax return will be rejected when you try to file using your new name. It can take weeks for a name change to be processed which will inevitably slow down your tax refund. So, do it now while there’s no rush.
Hold on to your day camp and childcare receipts
Every summer, working parents must decide what to do with their kids when school lets out. For many, the best solution is to put them in summer camp. If you enroll your child in day camp or pay someone to watch them while you go to work, your expenses count towards the Child and Dependent Care Credit. This year, the credit is more valuable than ever and fully refundable so make sure you keep your receipts. Thanks to the American Rescue Plan, you can claim up to $8,000 of expenses for one child or $16,000 for two or more children. The maximum credit is 50% of your eligible expenses.
Get health coverage for the rest of the year
Although you no longer get penalized for not having health coverage, it’s still a good idea to avoid being uninsured. In case you don’t know, medical issues are one of the leading causes of bankruptcy. Having health insurance can minimize the cost of unexpected medical bills. Due to the pandemic, there’s an ongoing special enrollment period until August 15th. Act fast because this may be your only chance to enroll in a new plan or make changes to the one you already have for 2021.
Check your tax withholding
So far, the IRS has issued over 289 billion dollars in tax refunds this year. While most people enjoy getting a fat check at tax time, there are others who’d prefer to bring home a bigger paycheck during the year. If you’d prefer to get a smaller tax refund or owed money when you filed, it’s a good idea to check your tax withholding. A withholding calculator can advise you on the best way to complete a new Form W-4 to have the appropriate amount of taxes withheld. Do it now so the changes have time to really make an impact.
Advance payments of the child tax credit are coming soon
Starting July 15th, the IRS will be issuing advance monthly payments of the child tax credit. The payments will be $300 per child aged 5 or younger and $250 per child aged 6-17. To receive the maximum payment, your modified adjusted gross income must be $75,000 or less for single filers, $112,500 or less for head of household and $150,000 or less for married filing jointly. The IRS will use the information from your 2020 or 2019 tax return to determine your eligibility. Those who qualify will receive the monthly payments automatically. If you’re eligible for a payment, but aren’t required to file a tax return, you must submit your information using the Non-filers tool on the IRS website to get paid.
Pre-register for next year’s taxes
We all love to save money so pre-register now with ezTaxReturn and receive a special discount when you file your taxes with us next year. It’s quick, easy and there are no coupon codes to remember. Just use the email address you sign up with and you’ll receive our best deal automatically.