Tax season can be a stressful time, especially with the various financial situations families experienced this year. You may have to take a few extra steps this tax season to ensure your return is accurate. Here are the top 2021 tax filing questions answered.
I received Advanced Child Tax Credit payments. How will this impact my 2021 Tax return?
Advance Child Tax Credit Payments were sent to eligible families from July 2021 to December 2021. These payments are not counted as income on your tax return, but are considered an advance payment of the Child Tax Credit that you may usually receive on your tax return. If you did receive advance payments, your tax refund may be smaller than years in the past. You should receive Letter 6419 (2021 advance CTC) in the mail that summarizes your advanced payments issued in 2021.
To review your Child Tax Credit payments or make any necessary changes to your information such as marital status, number of children, bank account information, and mailing address, visit the Child Tax Credit Update Portal.
What if I worked as an independent contractor, freelancer, or was self-employed in 2021?
Many people earned extra income doing jobs that would qualify them as self-employed. If you worked for companies such as Uber, Lyft, DoorDash, InstaCart, or other similar organizations, you would receive a Form 1099-MISC (miscellaneous) or 1099-NEC. You can receive more than one 1099-MISC depending on how many businesses you worked for during the year. The 1099-MISC and 1099-NEC report the total earnings from a company for independent contractors.
You need to report 1099-MISC and 1099-NEC income on a Schedule C attachment to your tax return. You can also present receipts to claim deductions that related to your job duties. For example, gas, car maintenance, and refreshments for clients can be claimed as deductions.
What if I received unemployment benefits in 2021?
Remember, even if you experienced unemployment in 2021, you still must file a tax return. According to the IRS, unemployment pay is considered taxable income and must be reported on your income tax return. You should receive Form 1099-G (Government Payments) from your state tax agency electronically or by mail. Form 1099-G reports unemployment compensation received and any federal income tax withheld.
For more information on unemployment benefits and to access your 1099-G form visit the SC Department of Employment and Workforce (SC DEW) site HERE.
When can I file?
The IRS has announced that you can start filing your 2021 tax return beginning January 24, 2022. The deadline to file your return will be April 18, 2022. If you file before the IRS starts accepting returns, one of several situations might occur:
- You might be charged extra filing fees or interest. Some tax preparers consider advance tax filing as a loan. Those extra fees come out of your tax return and you end up with less money in your pocket.
- Your tax software might hold your return until the IRS opens to accept returns. With Thrive Hub, we do not open filing until the IRS starts accepting returns.
Keep your money in your own pocket and wait to file for FREE with SC Thrive when tax filing opens.
Can I file for free with SC Thrive?
You can easily file your South Carolina state and federal taxes with SC Thrive this tax season. You may qualify if your Adjusted Gross Income (AGI) is $73,000 or less per year. You can file using Thrive Hub or in-person at an available tax clinic. Our tax sites are organizations and agencies in your communities you already know and trust like libraries, food banks, churches, and schools!
NOTICE: Due to ongoing COVID-19 concerns, in-person tax clinics will be limited in 2022. You are strongly encouraged to use the self-serve e-filing option.
Avoid a stressful and costly tax season by filing with SC Thrive. Stay updated on the latest news for 2021 tax filing by following us on social media. Learn how you can file your state and federal tax return online for free HERE.