How does the Advance Child Tax Credit (ACTC) effect my tax return?

For many people that received the advance portion of the Child Tax Credit (CTC), not much will change when filing. That’s because the age restriction for CTC was changed from 17 to 18 years of age for filing 2021. The amount of the credit also increased from $2,000 to $3,600 for dependents under the age of 7 and $3,000 for dependents age 7 and older. There are however income limitations to this credit. If a married couple earns more than $150,000, they are limited to the $2,000 per dependent CTC. The advance portion of CTC (what you received monthly) will reduce the amount of the credit on the tax return. Meaning if you have 1 dependent under 7, you will get $1,800 from July through December leaving you with $1,800 left on your tax return. This is $200 less than you received in 2020.


What happens if I received Advance Child Tax Credit and am not eligible to claim that specific dependent this year due to a divorce or separation?

This scenario will come down to your income. Congress passed what is called Safe Harbor amounts meaning if you make less than $60,000 as a married couple and should not have received the ACTC payments, you will not have to repay them. Once you’re over the $60,000 income Safe Harbor threshold, there is reconciliation and calculation of how much needs to be repaid which will be completed on your 2021 tax return.


How will I know how much I received in Advance Child Tax Credit?

The IRS is mailing forms right now called 6419. If you are married, each spouse will get a letter. If you have just one dependent under 7 qualifying you for $3,600 , then you received $1,800 throughout the year. Both taxpayers will receive a Form 6419 showing $900 each. Yes, you will need both 6419 forms to file your return.


What if I threw away my 6419 letters?

You can reconstruct that amount of ACTC from your bank statements from July 2021 through December 2021 (only if the ACTC was direct deposited into your bank account).


Do the stimulus payments from March 2021 go on our 2021 tax return?

Yes, they get reconciled on your 2021 return and they are not taxable nor repayable in the advance portion. This means if you got the stimulus in 2021 and shouldn’t have, you do not have to claim it as income or repay it back. However, if you file a return to receive stimulus payments and shouldn’t have, you will have to repay the amount received. The IRS is also mailing Form 6475 showing the amount each taxpayer received for the 3rd stimulus from March 2021.


If I receive payments through entities like, Zelle, PayPal, etc for personal items or reimbursements from other individuals, will I receive a tax form?

Form 1099K is from 3rd party card processing companies which is subject of a great debate amongst tax professionals. If it is a personal account and the transaction does not exceed certain thresholds you should not receive a 1099K. However, it is my opinion that many unnecessary 1099K forms will be sent out to individuals out of fear of missed reporting. This means if you get a 1099K and do not believe you should have, your best option is to report the income and adjust the amount of income for personal use to potentially avoid additional scrutiny on your tax return.


Do I really need a tax professional to do my taxes?

Do you own a business, have dependents, use itemized deductions, pay for daycare/dependent care, will receive an inheritance, owe taxes every year, want to maximize your tax dollar, pull funds from retirement, own rental property, own stock, win the lottery, enjoy gambling, dabble in cryptocurrency, ready to retire, have multiple jobs, have dependents in college or you are in college?  If you don’t have any of these, then maybe not. If yes, there is a chance you will miss something that could potentially cost you.


How much does it cost to get my taxes done?

How many stars are in the sky? Obviously, that is a stamen made in jest. However, every return is different. Two people can work the same job making the same amount of money and have the same number of children and have completely different tax returns. We offer a free consult to give you an accurate quote of how much our services cost. Without this consultation, it is near impossible to give an accurate quote without seeing your source documents. In general, across the country the average cost ranges from $220 to $400 and above. At Foos-Garvin, we want to give you an honest and upfront cost with our free consult. There are no surprises and no hidden fees.


How fast are refunds going to be processed?

Well, this one is super easy…who knows. The IRS, as of the starting date of e-filing 2021 returns, was still behind by 8 million returns. The average wait time during non-COVID filing seasons is approximately 7 to 15 days. During our current pandemic I have seen it range from 7 days to 14 months. Unfortunately, once we submit your return and receive an acknowledgment from the IRS, we have no control over how long it will take to be processed.


If I sell my personal home is that taxable?

Generally no if you sell your personal home and made less than $250,000 (single) or $500,000 (married filing joint) of profit, it will not be taxable unless you do not qualify for an exclusion.


If I did my return online last year will you need that to file my current year return?

Yes. There are several things that potentially flow through from your previous year return to this year.  Without last year’s return, we cannot accurately do this year’s return.


Can I email my tax documents to you?

No. Email is not a secure portal to send or receive sensitive documents. We do offer a secure portal for this purpose that works similar to email and meets Gram Bliley Leach Compliance. If you have a tax professional who is allowing you to email your documents to them, you should consider a new tax professional as they are not protecting your data.


Do you offer business tax consulting, payroll, bookkeeping, tax planning?

Yes. We are a full-service firm.  If you have tax or accounting needs, we can most likely meet them.


Do you bill for phone calls or meetings?

No. We would much rather you call without the weight of worrying about the cost of a phone call.