OHIO — A dreaded time for some, an exciting time for others, tax season is here and whether you have to pay Uncle Sam or get a return, there are important details you need to know about this year.
What You Need To Know
- All taxpayers have a host of benefits in place for 2021
- Ohioans can take advantage of a home school tax credit
- The child tax credit is bigger this year, but part of it has been paid out throughout the year
- File early to avoid being victim of scammers
Mark Steber, chief tax information officer for Jackson Hewitt, says all taxpayers have a host of benefits in place for 2021.
“New, bigger child tax credit: $3,600 [with the] dependent care credit, if you put your kids in day care to work. $4,000, or $8,000 if you got two kids,” say Steber.
He says the earned income credit is also higher and there are new charitable donations available even if you don’t itemize.
For Ohioans in particular, there are changes as well, Steber adds.
“From rate reductions to even a home school tax credit for qualified purchases,” Steber said.
Your employment status and your work location can add to your return. Steber says there are changes for the unemployment benefits. It was taxable in 2019, but that changed in 2020, and changed again back to taxable in 2021. If you’ve been working from home, you might have a home office deduction.
“Not so much if you’re an employee, you generally don’t qualify, but if you’re a part time or even full time self-employed and your business is out of your home, you might have a big deduction there. And if you’re both, an employee with a side gig, you still can get the benefit. So watch for the home office deduction if you have a home based business.”
What changes about the child tax credit?
The child tax credit is a credit applicable if you have dependent children that are on your tax return. It’s been around for decades, but for 2021, it’s been supersized. Up to $3,600, per young child, $3,000 for older children; with a direct dollar for dollar offset on your taxes. Half of it was started to be paid out in advance back in July through the year. But if you had a new child, born, adopted, fostered, year-year for shared custody rotations, you might be due a whole new $3,600 in credit, with no limit on how many children or how high your tax liability is, unless your earnings are high.
So, watch out for the child tax credit; there’ll be a statement coming in the mail that’ll help you reconcile it.
Every year, there are reports of tax return scams. Steber shared some tips on how people can protect themselves from falling victims of scammers
“If it sounds too good, ‘guaranteed refund,’ ‘free,’ ‘immediate money,’ ‘low and unexpected benefits,’ generally it’s not true, and you’re right. A lot of those pop up,” Steber said. “The best way to protect yourself is to file your taxes early, with a qualified, trusted tax professional that you know. You file early, you get your refund early, that’s pretty smart. You file early, you lock up your data, so that the IRS will have it protected if somebody else tries to sneak in and file a fake return. And if you file early and you do have more questions, like a home office, or new dependent or child credit, you have a bit more time. File early and with a qualified pro is your best advice.
Steber says even though people may not like the process, the majority of Americans do benefit from this season.
“I know it sounds dreadful, but three out of four get a tax refund. It’s your money.”
