About 19 million requests for filing extensions until October 17 were submitted to the IRS this year. During this time, the IRS reminds taxpayers who haven’t yet submitted their federal income tax returns for 2021 should do so as soon as possible and ensure to take advantage of all available credits and deductions.
Taxpayers who are qualified to file their returns are encouraged to prepare and file their returns for free electronically. Individual taxpayers get their tax returns quicker and more efficiently if they choose direct deposit and file electronically online. But in a case where they do end up owing taxes, sending the tax returns with full payments will prevent any additional penalties and interest.
7 Tax Benefits Taxpayers Should Acknowledge While Filing
Earned Income Tax Credit: Low to moderate-income individuals and families may be eligible for Earned Income Tax Credit.
Child Tax Credit: Even if families received monthly advance payments in the second half of 2021, they’re still eligible for Child Tax Credit.
Child And Dependent Care Credit: Families can receive a tax credit of up to $4,000 for one qualified person and $8,000 for two or more qualifying people when they pay expenses for the care of a qualifying individual so they can look for work and/or look for work.
Recover Rebate Credit (RRC): The RRC may be available to anyone who was not awarded the third round of Economic Impact Payments (EIP3) often known as stimulus payments, last year. Those who qualified but whose EIP3 was less than the full amount such as those who had a child in 2021 may also benefit from this credit.
Gift Deductions For Charities: Donations in cash can be deducted by married couples filing jointly for up to $600 and by individual taxpayers for up to $300. Most taxpayers who claim the standard deduction are able to write off any allowable monetary donations they made to charity in 2021.
American Opportunity Tax Credit And The Lifetime Learning Credit: By lowering the amount of tax due on an individual’s tax return, tax credits for higher education can help offset the cost of tuition and other expenses for the taxpayer.
Retirement Savings Contributions Credit (Saver’s Credit): A tax credit is available for making eligible contributions to an individual retirement account or employer-sponsored retirement plan.
No taxpayer in their right mind wants to be hit with that tax bill, especially if it ends up being a struggle to pay off. The tax credit won’t be sufficient enough to pay off any outstanding tax liabilities that taxpayers and businesses might have with the IRS.
Resolve Your Tax Bills
If you’ve found yourself in a nasty mess with the IRS, take a deep breath. For taxpayers who may have difficulty paying off an excessive amount of tax debt, there’s a new and improved relief program that consolidates many major relief programs into a one-size-fits-all assistance program. Any issues regarding back taxes, unfiled years, or any other tax-related problems may be solved through one program; the IRS Fresh Start Program!
How Simple Is Qualifying?
Considering that the Fresh Start Program is a federal program, you would think meeting the qualifications may be very difficult, but really, it’s a lot simpler and quicker than you think. Take the following steps in order to find out if you are eligible in as little as 3 minutes.
- Fill out some basic information about yourself and your back taxes here.
- Have a representative reach out to you to discuss your eligibility.
- Go through the enrollment process and finally reduce or eliminate your tax liabilities.