Income tax season starts Monday, and there are some changes to your taxes that might come as a surprise. So, what exactly should you be aware of?
For starters, there are changes to the advance child tax credit this year.
“It’s a one-time increase in the credit for 2021. Children under 6 are up to $3600 and children 6 through 17 the credit increased to $3000,” said Jeffrey Riddle, a CPA at Riddle & Pringle LLC.
These amounts phase out based on income limits and, if you took some of that credit in advance, your refund will be affected.
“They will be sending a letter that you’ll want to hang on to because it will define on it exactly what you got in advance,” said Rebecca Pringle, who also works as a CPA at Riddle & Pringle LLC.
Another change that may shock people is taxes on bitcoin.
“A hot button item with the IRS is crypto currency. If you’re buying or selling you need to report it,” Jeffrey said.
Last year’s stimulus check must also be reported this year. The IRS wants it reconciled on the tax return in case you didn’t get enough. It won’t be taxed and you don’t have to pay it back, but it must be reported.