Filing your taxes is rarely fun — but maximizing your refund can be. With all of the changes to tax laws in 2021, identifying all of the new tax deductions and credits can be a challenge. There was the expansion of the child tax credit , an extension of the charitable contributions deduction and the , to name a few. With so many updates and new tax laws, it’s hard to keep track.
To help, we’ve rounded up 13 of the most valuable tax deductions for most filers. These deductions are primarily for those who are not self-employed — a group with its own, largely separate, set of tax write-off options . We’ll keep this list updated as we receive new information on the 2021 tax year from the IRS.
Note that a tax year refers to the 12-month period that a tax return covers, usually from Jan. 1 to Dec. 31 in the US, and includes taxes owed on earnings during that period. A tax season is the period, generally between Jan. 1 (it was Jan. 24 this year) and April 15, when taxpayers prepare financial reports for the previous year and submit their tax returns. That means taxes for earnings during the 2021 tax year would be included on a 2021 tax return that taxpayers submit to the IRS during the 2022 tax season.
1. Child tax credit
The new child tax credit was made fully refundable in 2021 and increased to up to $3,600 per year per child through age 5, and up to $3,000 per year for children ages 6 to 17. (Parents of newborns born in 2021 can also claim this credit in 2022.) Eligible families automatically received half the total of the payments in advance monthly installments in , unless they unenrolled. When families file their taxes in 2022, they’ll get the remainder of the benefit they didn’t receive through advance monthly installments. Even if a parent makes little to no income, they are still eligible for the expanded child tax credit, but payment amounts do phase out with higher incomes.
Dependents who are 18 years old can qualify for $500 each. (więcej…)