Tax Season 2022 is upon us!
Note the following filing deadlines:
For most people, the deadline to file 2021 income tax returns is Monday, April 18, 2022. This is three days later than the traditional April 15 deadline. Also note that for those receiving a tax refund, the process is expedited by filing returns electronically and when appropriate, having these funds deposited directly into bank accounts, prepaid debit cards, or mobile apps.
In 2021, the federal government once again responded to the economic downturn with some relief measures that will lessen the tax burden for those taxpayers who incurred childcare expenses, received post-secondary education loans, and/or paid out-of-pocket medical expenses.
However, unemployment benefits that were part of the 2020 American Rescue Plan do not extend to include tax breaks on any unemployment benefits that were received in 2021.
Child and dependent care benefits
For 2021 returns, the American Rescue Plan Act once again allows taxpayers to directly reduce their taxes by the amount spent on expenses related to child or dependent care: daycare, babysitters, or related transportation. To take advantage of this credit, families must submit all their receipts and other monetary proof when filing their tax returns.
“The unemployment benefits that were part of the 2020 American Rescue Plan do not extend to include tax breaks on any benefits received in 2021.”
Student loan forgiveness
Student loans are not considered taxable income because all of the money that is received must be paid back at some point. Therefore, unless the loan amount exceeds the amount that is needed for covered school expenses, student loans are not taxed by the IRS.
Out-of-pocket medical costs
There is also a tax break for certain unreimbursed or out-of-pocket medical costs that are not covered by health insurance. The current percentage for 2021 taxes is 7.5 percent of the adjusted gross income (AGI).
As an example, if a taxpayer’s adjusted gross income is $100,000, then the only medical expenses they could deduct on Schedule A are those expenses over $7,500.
Get Your Tax and Accounting Questions Answered by Our CPA Firm in El Paso, TX
If you’re looking for a reputable CPA firm in El Paso, TX consider calling us at Marcus, Fairall, Bristol + Co., PLLC! We’ll answer any and all of your accounting-related questions such as IRS issues. We offer our clients a variety of accounting services such as the following:
- Forensic Accounting
- Tax Problems and Resolution
- Tax Planning for Individuals
- Small Business Accounting
- Non-Profit Accounting
Marcus, Fairall, Bristol + Co., PLLC
230 Thunderbird Dr Ste G, El Paso, TX 79912
Phone: (915) 775-1040