Accounting can seem like a minefield full of complicated lingo and confusing rules, especially if you are busy with your job and family or running a business. #AskDave is here to answer your pressing accounting and tax questions — and hopefully make the whole endeavor seem less complicated.
Dave Wendell, of Elite Accounting, built a full-service accounting firm while managing another business and earning a bachelor's in accounting from DeVry University and an MBA from Keller Graduate school of management. Based in downtown Twin Falls, he's committed to helping his clients reach their personal and professional goals.
In this installment of #AskDave, he tackles a question facing many parents: What is the advanced child tax credit, and why am I receiving the payments?
“The advanced child tax credit is basically an early payment of the child tax credit you would be eligible for on your 2021 taxes. This payment is estimated at 50% of your tax credit as calculated through the IRS based on your 2019 and 2020 taxes. Congress passed the American Rescue Plan, which included the advanced payments and increased the benefit to $3,000, up $1,000 from before.
If you are not receiving the advanced child tax credit visit irs.gov or see your tax professional. They can guide you in the right direction to get this advance. Keep in mind there are certain criteria that need to be met in order to receive this benefit; your tax professional can help determine this for you. If you are receiving the advanced credit and wish to discontinue, you have that option; either see your tax professional or visit irs.gov.
Keep in mind that receiving this advance will reduce your child tax credit at the end of the year. Your tax professional can help you determine the right course of action to take to help decide if taking the advanced credit is better or if you should wait and take the full credit at the end of the year.”
Dave has owned and operated Elite Accounting since 2008, adding the payroll service in 2011 and tax services in 2011. He's also an IRS Enrolled Agent, so he can help businesses and individuals with more serious tax matters, too. If you'd like to set up a consultation to learn how he can help you or your business, simply call 208-825-1641 or fill out this form.
In addition, Dave loves answering questions! Click here to submit to #AskDave and he just might answer your question in a future article.