Sondeland, CPA

It's almost a new year and time for a new plan for your paper mess. Find out how to get started...

Keep It or Purge It? Is the paper mess at home getting the best of you? Are Christmas cards flowing in; followed by tax documents after the New Year; and then mixed amongst all that is the regular mail and papers from school? If you’re like me, it can feel like you’re buried in paper this time of year. It's a new ye...

We're Open and accessible by Expressway. Open for tax signings
Friday 2-5
Saturday 9-12
Monday 8-12

Our office remains closed Friday morning as our lot and road is still too full. Please contact our office if you have immediate needs.

Our office is closed through Thursday due to the weather. We will be open Saturday for tax signings. Online signing is available.

It's already almost the end of the year. Make sure you are ready to wrap-up 2021 with these 8 Year-End action steps.

8 Year-End Action Steps 8 Year-End Action Steps for small business owners to wrap up their year. Become more efficient with your business and be prepared for tax time.

The IRS has now made available on their website the option to opt out of the Advanced Child Tax Credit.

Payments will begin in July and continue for the remainder of 2021, unless you opt out. These payments can be a great help for a lot of families in need, but taxpayers need to be aware of how the advance payments work so they have no surprises at tax time.

You may be wondering why you would want to opt out of receiving this money. First off, everyone needs to realize THIS IS NOT STIMULUS MONEY. This is an advance of your tax refund that you would normally receive in the spring of 2022.

If you typically pay in each year with your tax filing - the advance child tax credit is not for you. You should opt out.
If you receive a refund of less than $500 - the advance child tax credit is not for you. You should opt out.

If you typically receive a refund larger than $500 you can do some simple math to help you determine if you should opt out.

The 2021 child tax credit is $3,600 for each child age 5 or under. It is $3,000 per child ages 6-17. Last year this credit was $2,000 per child age 16 and under. If you do not opt out, you will receive half of this credit in advance payments over 6 months.

Here comes the math:
1. Figure out your credit for last year
2. Figure out your credit for this year after the advance payments
3. Take the difference between the two figures. This is how much less your refund will be this year.

Let's do an example. Let's say I have 3 kids, ages 8, 10, and 12. My credit last year was $6,000 (3 kids * $2,000 each) My credit this year will be $9,000 (3 kids * $3,000), however if I don't opt out, I will receive half of the $9,000 as advanced payments or $4,500. Which means my actual credit on my return will be $4,500. I will receive a refund $1,500 less than I did last year ($6,000 - $4,500). Assume last year I received an $800 refund, I can expect to pay in this year. I should opt out.

You can use the link below, if you need to opt out.

https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021

As always, everyone's tax situation is unique so seek out professional advice from your tax preparer.