There’s a lot of confusion about the advanced child tax credit payments that are starting to come out each month from July to December this year. These payments are advances on your refund, so let’s give a really clear example if you are getting the monthly refund of $250 because you have a child.
And you get to the end of the year and you file your taxes and you have no way to get that child tax credit, maybe that child is not on your returning anymore. You would owe back those payments, so please be aware of how your tax situation is affected by these advanced tax credits. I don’t necessarily recommend opting out unless you were the person who will come to the next day feel unhappy, no money left to pay your taxes.
If you opt out, you’re giving the government an advanced refund on your money at an interest free rate. So we never love to have that happen. Also, if you’re wanting to have that big refund in April, that’s a fallacy. Remember it’s your money right now? And we’ve seen so much trouble this year with the IRS, even fissuring the refunds in a timely basis, that I don’t recommend that you have an overpayment on your account at all.
If you have any questions about how this interacts with your tax situation, we’d be happy to help. I’m Donna Bordeaux from Calculator Moves. Please follow us on Facebook, Instagram, and LinkedIn. Make sure you check out our blog and our website from the link below, subscribe to our YouTube channel, and hit the bell to be notified when we post and contact me, email me at donna@calculatedmoves.com.
Donna Bordeaux, CPA with Calculated Moves
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