Tax Tip: Maximizing Your Tax Credits
Are you maximizing your earned income tax and child tax credits?
The Consolidated Appropriations Act (CAA) of 2021 included a temporary change that could result in larger earned income tax credits and child tax credits.
A tax credit is an amount that taxpayers can subtract, dollar for dollar, directly from taxes owed.
While the above credits would generally be based on 2020 earned income, the act permits taxpayers to determine the credits by substituting their earned income from 2019, if that amount is greater than the taxpayers 2020 earned income.
This could produce larger credits for eligible taxpayers who earned lower wages in 2020 due to the pandemic.
Consult with your tax professional at Ketel Thorstenson about this or other tax matters because each situation is different. Don’t navigate the difficult and ever changing tax codes and legislation on your own. Ketel Thorstenson CPAs and tax professionals receive advanced training and continuing education all year long to keep our service on the forefront of the tax industry. Call us today for guidance on tax planning, tax return preparation, and tax legislation affects or questions.