Earn the Maximum Tax Refund With These Two Tips for Your 2021 Filing

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When it comes to filing your tax return, any potential saving tips are welcome. While some tax tricksters spend an inordinate amount of time finding hidden loopholes to save some precious pennies, there are a couple of tips available to all taxpayers in plain sight. For 2021, a charitable tax credit of $300 is available, and the Child Tax Credit is fully refundable for parents.

See: Major Tax Changes for 2022 You Need To Know
Find: IRS Revises Child Tax Credit Guidance: Learn What’s New for 2022 Tax Filing

1. Charitable Donation Rule

The IRS has created a special tax rule for 2021 filing that allows Americans to deduct certain charitable donations on their taxes, lowering their tax liability and translating them into savings. Single filers can deduct up to $300 and married couples that file jointly can deduct up to $600. As a bonus, you don’t even have to itemize your taxes to claim it.

Due to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress in March 2020, a loosening of charitable restrictions has given a special opportunity to households who would normally take the standard deduction when they do their taxes.

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Remember, these contributions made in 2021 must have been to qualifying charities. Money given to any cause or non-profit organization is always worthwhile, but only donations to registered charities qualify for an income tax credit.

2. Child Tax Credit

In 2021, the American Rescue Plan Act (ARP) expanded the Child Tax Credit significantly for one year, making it the largest U.S. child tax credit ever and providing most working families with $3,000 per child under 18 years of age and $3,600 per child 6 and younger.

Learn: What 2022 Means for Stimulus Checks and the Child Tax Credit
Explore: Some People May Need To Pay Back the IRS — Are You One of Them?

The ARP also made the credit fully refundable and provided tax credit options for families to take half the credit in six monthly payments. On July 15, 2021, 39 million households — providing for 88% of children in the United States — automatically began receiving payments of between $250 and $300 if they had chosen to. Regardless of if you did or didn’t take half the credit starting in July, you must claim it on your taxes to get the full refund or the rest that you are owed.

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About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.
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