IRS Changes Impact Your Taxes
April 18, 2022 is the deadline for filing 2021 federal taxes. Beware that this year is different in that expenses not recognized as tax-deductible in 2020 taxes may be covered in 2021 filing. The American Rescue Plan also increased and expanded the Child and Dependent Care Tax Credit, making more people eligible and increasing the total credit to $4,000 for one qualifying individual and $8,000 for two or more. Dependent care is the classification for caregiving.
New in 2022
The IRS efforts to ensure privacy and security of tax returns has new tools for you. I recommend that you read their publication and follow their advice to keep your money and identity safe. https://www.irs.gov/pub/irs-pdf/p4524.pdf
Before you read on, know that this column is a resource only and not intended as professional consultation.
Where to Find Help
Free File. This program lets you prepare and file your federal individual income tax return for free using brand-name tax-preparation-and-filing software or Free File fillable forms.
VITA and TCE The Volunteer Income Tax Assistance (VITA) program offers free tax help to people with low-to-moderate incomes, persons with disabilities, and limited-English-speaking taxpayers who need help preparing their own tax returns. The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors.
MilTax. Members of the U.S. Armed Forces and qualified veterans may use MilTax, a free tax service offered by the Department of Defense through Military OneSource.
AARP Foundation Tax-Aide helps all tax filers with a focus on taxpayers who are over 50 and have low to moderate income. There are no eligibility requirements.
Documents Needed for Tax Assistance
- Proof of identification (photo ID)
- Social Security cards for you, your spouse, and dependents
- An Individual Taxpayer Identification Number (ITIN) assignment letter may be substituted for you, your spouse, and your dependents if you do not have a Social Security number
- Proof of foreign status, if applying for an ITIN
- Birth dates for you, your spouse, and dependents on the tax return
- Wage and earning statements (Form W-2, W-2G, 1099-R,1099-Misc) from all employers
- Interest and dividend statements from banks (Forms 1099)
- Health Insurance Exemption Certificate, if received
- A copy of last year’s federal and state returns, if available
- Proof of bank account routing and account numbers for direct deposit such as a blank check
- To file taxes electronically on a married-filing-joint tax return, both spouses must be present to sign the required forms
- Total paid for daycare provider and the daycare provider’s tax identifying number such as their Social Security number or business Employer Identification Number
- Forms 1095-A, B and C, Health Coverage Statements
- Copies of income transcripts from IRS and state, if applicable
Tell Congress to Pass Credit For Caring
The Credit for Caring bill amends the Internal Revenue Code of 1986. It would provide a nonrefundable credit for working family caregivers. I encourage you to reach out to your Congressional representative and demand they support this important legislation. The Credit for Caring Act has been introduced every year since 2016. Both the House and Senate, Democrats and Republicans have supported this Act in previous years. It’s time to get this important change to our tax code over the finish line.
