Tax Season

[mac5155]

That's correct on all questions.

If you have one kid under 6, you can opt out and get the full $3,600 when you file, assuming you are under the phase out limit. Or you can take 6 monthly payments of $300 for a total of $1,800 by December and then claim the other $1,800 on your 2021 tax return. You can take this example and expand upon it based on number of children and ages.

How does one opt out?

[tifosi77]

Maybe they meant to go after Guy Fieri?

I'm gonna need you to get all the way off my back about this.

[Beveridge]

That's correct on all questions.

If you have one kid under 6, you can opt out and get the full $3,600 when you file, assuming you are under the phase out limit. Or you can take 6 monthly payments of $300 for a total of $1,800 by December and then claim the other $1,800 on your 2021 tax return. You can take this example and expand upon it based on number of children and ages.

How does one opt out?

There is supposed to be an online portal. When that will come out is anyone's guess. They say by July 1.

[dodint]

Maybe they meant to go after Guy Fieri?

I'm gonna need you to get all the way off my back about this.

Alright then.

[NTP66]

That's correct on all questions.

If you have one kid under 6, you can opt out and get the full $3,600 when you file, assuming you are under the phase out limit. Or you can take 6 monthly payments of $300 for a total of $1,800 by December and then claim the other $1,800 on your 2021 tax return. You can take this example and expand upon it based on number of children and ages.

How does one opt out?

There is supposed to be an online portal. When that will come out is anyone's guess. They say by July 1.

The URL is irs.gov/childtaxcredit2021, but the tool isn't available yet. We just received our letter about this, and it sounds like taking these monthly checks and throwing it into VTSAX is the way to go...

[mac5155]

I'm fairly confident my income has grown to where I'll be at a phased out level. So I may just decline them now.

[willeyeam]

I'd have to confirm this but I don't believe you'd have to pay it back if you get phased out so you might as well take the money while you can

[Beveridge]

But the phase out is only for extra 1,600 right? It will still be the large number for the 2,000 phase out.

So if he got his 1,800 now and then was over the lower phase out, he'd only have 200 left to claim?

[mac5155]

I had thought it was a "fronting" of the credit. I'll take it and save it for tax time I guess.

[NTP66]

FYI, the eligibility tool for the child tax credit is now available online: https://www.irs.gov/childtaxcredit2021

Rather than deal with any hassles come tax time, I'm going to simply unenroll from advanced payments. Source:

A10. No. Advance Child Tax Credit payments are not income and will not be reported as income on your 2021 tax return. Advance Child Tax Credit payments are advance payments of your tax year 2021 Child Tax Credit.

However, the total amount of advance Child Tax Credit payments that you receive during 2021 is based on the IRS’s estimate of your 2021 Child Tax Credit. If the total is greater than the Child Tax Credit amount that you are allowed to claim on your 2021 tax return, you may have to repay the excess amount on your 2021 tax return during the 2022 tax filing season. For example, if you receive advance Child Tax Credit payments for two qualifying children properly claimed on your 2020 tax return, but you no longer have qualifying children in 2021, the advance Child Tax Credit payments that you received based on those children are added to your 2021 income tax unless you qualify for repayment protection. For more information regarding your eligibility for repayment protection, and how to reconcile your advance Child Tax Credit payments with your Child Tax Credit on your 2021 tax return, see Topic H: Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return.

For this reason, you may wish to unenroll from receiving advance Child Tax Credit payments. You will be able to unenroll through the Child Tax Credit Update Portal (CTC UP), which will become available in June. For more information regarding the CTC UP, see Topic F: Updating Your Child Tax Credit Information During 2021.

[Beveridge]

I was planning on unenrolling for a couple of reasons. Thanks for the heads up. Rather get the full amount at tax time then they screw something up.

[Beveridge]

FYI, the eligibility tool for the child tax credit is now available online: https://www.irs.gov/childtaxcredit2021

Rather than deal with any hassles come tax time, I'm going to simply unenroll from advanced payments. Source:

A10. No. Advance Child Tax Credit payments are not income and will not be reported as income on your 2021 tax return. Advance Child Tax Credit payments are advance payments of your tax year 2021 Child Tax Credit.

However, the total amount of advance Child Tax Credit payments that you receive during 2021 is based on the IRS’s estimate of your 2021 Child Tax Credit. If the total is greater than the Child Tax Credit amount that you are allowed to claim on your 2021 tax return, you may have to repay the excess amount on your 2021 tax return during the 2022 tax filing season. For example, if you receive advance Child Tax Credit payments for two qualifying children properly claimed on your 2020 tax return, but you no longer have qualifying children in 2021, the advance Child Tax Credit payments that you received based on those children are added to your 2021 income tax unless you qualify for repayment protection. For more information regarding your eligibility for repayment protection, and how to reconcile your advance Child Tax Credit payments with your Child Tax Credit on your 2021 tax return, see Topic H: Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return.

For this reason, you may wish to unenroll from receiving advance Child Tax Credit payments. You will be able to unenroll through the Child Tax Credit Update Portal (CTC UP), which will become available in June. For more information regarding the CTC UP, see Topic F: Updating Your Child Tax Credit Information During 2021.

Heads up.

IRS is saying both have to unenroll so make sure you access and opt out under your wife's SS# as well.

[eddy]

I unenrolled this morning, had to take drivers license photo and scan face into the system... does my wife have to unenroll as well of we file jointly and she doesn't have income?

[Beveridge]

I believe so.

If I'm married filing jointly, does my spouse also need to unenroll? (added June 21, 2021)

A6. Yes. Unenrolling applies to the individual only.

[eddy]

Good deal, thanks

[NTP66]

Source of the post Heads up.

IRS is saying both have to unenroll so make sure you access and opt out under your wife's SS# as well.

Yep, saw that and had my wife unenroll, too. The ID.me enrollment sucked on a desktop - could never verify my identity. Had to use my iPhone to finish the enrollment.

[mac5155]

ID.me enrolled myself today and what a giant PITA. Now I get to do my wife's also.

On a somewhat related note, I think married filing separately may be beneficial to us this year for these credits, but I'm not totally sure. Cross that bridge when I get there in February I guess. My income went up substantially this TY and it's not even over yet..

[mac5155]

I would like to shove an american flag up the arse of whoever decided ID.me is required to opt out of an advance payment.

I've taken 3 different pictures of my wife's driver's license and 4 different pictures of her passport with 2 different devices and they can't be verified.

Seriously, the government never ceases to amaze me with their incompetence.

[mac5155]

Hahahahahahah. Uploaded the SAME EXACT FILE a fourth time and it worked. MAGIC BABY.

ugh

[Beveridge]

I started down the path of ID.me. Hated it and just created another IRS account for my wife to opt out.

[mac5155]

So anyway, my AGI is going to be a little higher than normal this year. First time I am considering things such as contributions to a Roth (I never have done this - everything is in a regular brokerage right now).

As I understand, $5500 post-tax can directly reduce AGI, right?

Any other 'general' tips to reduce AGI? I don't have the deductions, so standard will still be the one I take. But I've made significant money on stonks (THANKS GME) this year.

I may end up just hiring MIMH's tax guy.

[Beveridge]

Roth will not reduce tax liability. A traditional IRA will reduce AGI if you are eligible to contribute to one, but there are rules you have to watch out for that might apply to you.

If you can contribute to a normal 401k at work, you could up your contributions and that will lower your AGI.

A contribution to your favorite 501c3 will give you a max of 600 for 2021 off your AGI as well if married filing jointly.

[mac5155]

I am not eligible to contribute to one. Upped the wife's 401k contribution significantly for the remainder of the year. By my napkin math, we'll be about $10k over the limit, so it will phase us out slightly but not completely, which is good.

[MrKennethTKangaroo]

you're not eligible to contribute to your 401k?

[mac5155]

you're not eligible to contribute to your 401k?

A traditional IRA. Not eligible <for tax benefit purposes> (far as I can tell)

I contributed 17,500 to my 401k last year. This year should be near the limit.