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Taxpayers are worried as their tax refunds will be smaller this year

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Little Rock, Arkansas — Following the Advanced Child Tax Credit that was issued to thousands of parents, Americans may receive less of a return this year.

Taxpayers with children were automatically enrolled in the credit unless they opted out which required filing documents with the Internal Revenue Service.

A founding partner of Garland & Greenwood CPAs and Advisors explained the biggest change for taxpayers is that child credit.

“Something that’s critical this year is for the advanced payment of the child tax credits, you want to make sure that those have been reconciled to what was actually received that way you don’t have any delays in processing your tax returns,” he said. “For example, if you had one child, a $3,000 tax credit, you should have received $1,500 over the course of the disbursements or the timeline of the disbursements and you would actually pick up the other $1,500 when you go to file your tax return.”

He also pointed to a change: This year unemployment is considered taxable income. It was not in 2020.

“We know unemployment is going to be taxable. In 2020, there was an exclusion of around $10,000 that was non-taxable, that’s not getting reinstated for 2021 so that will be taxable,” he said.

Federal government relief funds, such as assistance with paying rent and utilities is not taxable income.

Gasaway offered tips to receive your tax return as quickly as possible:

1. File electronically;
2. Provide banking information for a direct deposit;
3. Be sure to fill out all documents necessary;
4. Do not forget to reconcile the child tax credit.

 

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