The deadline to submit your 2021 tax return or extension is looming in just under a month. But, there’s no need to panic. If you take steps to get tax credits that you are eligible for, you could end up with a refund.
Let’s take a look at the top three things you need to know about 2022 tax credits.
1) Claim Your Individual and Family Credits
The expanded Child Tax Credit benefited many families with children. Some people received child tax credit payments from July to December. If so, you can claim the other half of your credit by filing your taxes.
Some people did not receive monthly payments, mostly because of opting out of monthly payments or due to not usually filing taxes. You can also get the full IRS child tax credit payments when you file your taxes this spring.
If you had a child born in 2021, you will need to file your taxes this year to claim the 2022 child tax credit.
A sometimes overlooked credit is the Electric Vehicle or EV tax credit 2022. If you purchased an eligible battery or electric plug-in hybrid vehicle, you may be able to claim a tax credit. In fact, this credit could be worth up to $7,500.
2) Don’t Forget Business Tax Credits
A lot of emphasis is put on family and child tax credits, but it’s important to note that there are also tax credits for businesses too. These can save your business a lot of money but you need to remember to file for them.
The Employee Retention Tax Credit helped many businesses keep employees on the payroll. If your business was impacted financially by the pandemic, you may be able to receive a refundable credit for up to 50% of $10,000 in paid wages.
While the ERC Deadline passed for many businesses, recovery startup businesses may still claim the ERC. In addition, certain employers may still file a claim for prior quarters by filling out the appropriate forms.
3) Be Prepared
If you want to take advantage of these tax credits, there may be some steps you need to take when filing. Many of these credits simply involve gathering the necessary documentation.
For example, you should double-check that the total amount of advance payments you received for the child tax credit is correct on IRS Letter 6419. You should have already received this letter by mid-March of 2022.
In addition, Letter 6575, shows information about the third stimulus payment. If you did not receive the full amount in your stimulus checks, you can receive it when you file your return. However, you will need this letter to verify the amount.
Due to the pandemic, the annual tax filing season was extended over the past two years. However, that is not the case this year. You need to have your return and any paperwork ready by the deadline.
Make sure you file by this year’s deadline, April 18. The deadline is different from the traditional April 15 date due to the weekend.
If you had little to no income, you might be tempted to skip filing your tax return. However, if you want to claim these or any other tax credits, you need to file a return.
Take Full Advantage of 2022 Tax Credits
When you file your return this spring, you should make sure you claim all 2022 tax credits that you are eligible for. This can help you save a lot of money on your return. It is just important that you follow all deadlines and guidelines when doing so.
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