1. Missing a tax break
Tax credits and exemptions are available, particularly for those who were financially affected by the pandemic. The latest COVID-19 economic relief package, signed by President Donald Trump on Dec. 27, created a special break for obtaining the Earned Income Tax Credit, a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children.
But the deal isn’t automatic. Filers and the people who help them with their taxes now must be aware of the new option and take the time to review 2019 earnings, as well as earnings in 2020, to calculate the credit. And they cannot simply assume that they won’t qualify for it.
IRS tax season 2021: 9 costly tax mistakes to avoid
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IRS tax season 2021: 9 costly tax mistakes to avoid
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9 Valuable Tax Breaks Parents Can Take Advantage of Right Now
A couple reviews work on their laptop while their children play around them.
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Along with the prospect of $1,400 stimulus payments, parents have another reason to cheer President Joe Biden s $1.9 trillion pandemic relief package currently working its way through Congress: The legislation contains a big tax break specifically for Americans with children under 18 that could give families $250 to $300 a month per child. You don t have to wait for the plan to become law, though, to grab existing breaks that could cut your tax bill or increase your refund this year by hundreds, or even thousands, of dollars.