What You Need to Know Before Filing Your 2021 Taxes

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1.31.22

What You Need to Know Before Filing Your 2021 Taxes


The deadline to file your 2021 taxes is April 18, 2022. Here are a few new IRS tax changes that could impact your filing this year:
  1. Child Tax Credit: Families who received advance payments this year will receive Letter 6419 from the IRS. The letter includes the total amount of advance child tax credit payments taxpayers received in 2021.
    The IRS says, eligible families who didn't get monthly advance payments in 2021 can still get a lump-sum payment by claiming the child tax credit when they file a 2021 federal income tax return next year.
  2. Inflation: Income tax brackets will rise to adjust for inflation and so has the standard deduction, a static deduction claimed by the vast majority of taxpayers. If your income is fairly stable compared to last year, this could even mean a tax cut for you.
  3. Earned Income Tax Credit: To adjust for inflation, the IRS increased the 2022 maximum earned income tax credit amount for qualifying taxpayers who have three or more qualifying children.
  4. Contribution Limit Increases: The IRS recently announced changes to retirement contribution limits including those for 401(k), 403(b), 457 plans, Thrift Spending Plans and Health Savings Accounts. Here is a list of all of the changes from the IRS.
  5. Stimulus payments and Recovery Rebate Credit: If you didn't qualify for the third economic impact payment "stimulus check" or didn't get the full amount, you could be eligible for the Recovery Rebate Credit. The IRS will send Letter 6475 in early 2022, which contains the total amount of the third stimulus payment.
Now is the perfect time to get organized with Provident’s Tax Filing Tool Kit. Learn how and when you will receive important tax documents from Provident. For the latest updates from the IRS, visit the IRS website and search for the IRS Tax Tips page.
 
Note: Provident Credit Union and its affiliates do not provide tax, legal or accounting advice. This material is for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors.
 

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