Tax day is coming soon. Here’s what you need to know about reporting your 2021 tax
Tax day is coming soon.  Here’s what you need to know about reporting your 2021 tax

Tax day is coming soon. Here’s what you need to know about reporting your 2021 tax

Nevertheless, the IRS still expects you to file your 2021 return and pay what you still owe within the filing deadline, which is April 18 for most taxpayers.

If you have not submitted yet, here are answers to some key questions that will help you through the process:

Ideally, yes. But if it turns out to be difficult – or you just are not in the mood – apply for an automatic extension of six months by using Form 4868.
Of course, there are some taxpayers whose filing deadline is later than April 18th. They include residents of Maine and Massachusetts whose official filing date is April 19th. And the deadline is a month or more later for people living in federally declared disaster areasas well as U.S. taxpayers living outside the U.S. on April 18th.

If I owe money, when will it be paid?

For most people, you have to pay any remaining 2021 income tax that you still owes before April 18 application deadline, even if you get one automatically six-month extension of the file.

What if I do not pay on time?

You’ll have to pay even more than you owe because you’re being beaten fines and interest.
If you really can not afford to pay on time and you have a good reason why, you can file your case with the IRS by attaching a statement to your return when you file. If the IRS accepts your statement, it may waive it penalty for late payment. You must at least show that your non-payment is not the result of “intentional neglect. “
To show it, try to pay what you can when you file, even if it is not the total balance. If this is not possible and you are really behind, you may be able to create one repayment schedule with the tax authorities.

What if the IRS owes me money?

If you file an exact return electronically and owe a refund, the IRS will likely have that money sent to you or deposited directly into your bank account within 21 days of receiving your return.

You can check the status of where things stand by using the IRS online tool Where’s my refund?

I worked remotely for most of 2021. Will it affect my taxes?

It depends on. If you worked from a state other than the one where your employer is based, you may be subject to income tax rules in two or more states.

At the very least, you will probably need to file more than one state tax return for 2021, which will cost you more if you pay someone else to prepare your taxes.

And in some cases – primarily involving five states that have so-called convenience rules – you may even be double taxed on the same income.

The advanced child tax deduction is so confusing. How should I handle it on my tax return?

Good news: It’s you does not imagine things. The child tax deduction is the reason headaches for both filers and tax professionals alike.

A lot of temporary changes were made to the tax deduction for children just for 2021. Initially, it was raised to $ 3,600 per child. children ages 5 and under and up to $ 3,000 per child. children aged 6 to 17.

It was also temporarily made fully refundable for 2021, meaning you can get the maximum credit amount even if it exceeds your federal income tax liability.

But this is where the real confusion comes in: the IRS has probably already sent you half of the credit you’re entitled to (six months’ worth) through monthly checks sent out between July and December.

You should have got one letter from the tax authorities within the last few months with details of what you have already been paid. This is an amount you must report on your return. And then you have to claim the other half of the credit you owe that you get in the form of a refund.

I received a letter from the IRS stating that it sent me a stimulus check. Is it taxable and taxable?

The Ministry of Taxation recently sent an email Letter 6475 to taxpayers who received one stimulus payment in the third roundwhich the agency began issuing in March 2021.
Although the payment is not taxable, you must report the number from that letter on your 2021 return. The last thing you want is for there to be a discrepancy between the IRS records and what is on your return. It will cause delays by processing your return and issuing your refund.
And you want to use that number to find out if the IRS actually owes you more using one recovery rebate creditonce you have calculated how much more of the stimulus payment you will have to pay based on your actual 2021 income.

I have cryptocurrencies. Should I report it?

It depends on.

Just buying and possessing cryptocurrencies are not taxable events.

But if you sold cryptocurrencies, used them to buy something or were paid in crypto, it’s taxable events and must be reported.
Virtually currency is taxed as property, or as a investmentwhen you sell them. To make things more confusing, using them to buy something technical counts as selling. So you will be subject to capital gains tax when you sell them.
If you are paid bitcoin or other crypto, on the other hand, that will be treated as Taxable income for you. The same will revenue from mining or operations.
And from next year, your crypto activities will be subject to third party reporting – which means that both you and the IRS will receive the same tax forms that report your sales and income.

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