Measure Twice, File Once
The adage “measure twice, cut once” is sage wisdom, and anyone who does woodworking hopefully practices this regularly. I don’t know this from experience, but my father and father-in-law have built several beautiful pieces in my home, as well as countless forts for grandkids in the family. To save yourself time, grief, and money, you want to make sure that each cut is what you want before you take the saw to it.
Last week I was surprised to see the IRS had mailed both my husband AND myself a Letter 6419. This form is the Advance Child Tax Credit Reconciliation. I was puzzled that my husband and I had a letter with identical amounts upon first glance. It turns out the IRS is crediting each of us with half of what they paid us.
I say this as a segue to my advice of “measure twice, file once .”I strongly recommend adding the dollar amounts of those two IRS letters and confirming it matches the total amount you received from July to December. Unfortunately, the IRS has been known to put false numbers documents. A quick online search already has articles warning of incorrect amounts.
From personal experience, I can share the IRS has had some troubles. The IRS had inadvertently mixed up a stimulus payment amount and a refund amount when providing me with tax documents. This led to a months-long delay in my return being processed and then shock (to me) when I owed the IRS more money.
To save yourself the headache when you file your return, double-check the amounts received against the amount reported on the letter. What you receive needs to be reflected on your return.
Also, as a quick note, for those of you who did receive payments (or anyone needing to pass this information along to adult children getting ready to file taxes), the tax bill may look different this year. Those payments are considered a pre-payment of what is usually claimed on a tax return. Depending on where your taxable income lands, you may find that you have no additional child tax credit to claim this year.
While we are not CPAs here at RK, we stand ready to answer questions you may have about this year’s tax filing season. We can also help you determine what, if any, specific questions you may need to address with your CPA.
I can tell you that my calculator will be double (and likely triple) checking the numbers before I hit the final “submit” button to wrap up 2021!