The Internal Revenue Service encouraged taxpayers to take important actions to help them file their federal tax returns in 2022, including special steps related to Economic Impact Payments and advance Child Tax Credit payments.

Here are some key items for taxpayers to consider before they file next year.

• Families who received payments will need to compare the advance Child Tax Credit payments that they received in 2021 with the amount of the Child Tax Credit that they can properly claim on their 2021 tax return
• Taxpayers who received less than the amount for which they are eligible will claim a credit for the remaining amount of Child Tax Credit on their 2021 tax return.  Taxpayers who received more than the amount for which they are eligible may need to repay some or all the excess payment when they file.
• In January 2022, the IRS will send Letter 6419 with the total amount of advance Child Tax Credit payments taxpayers received in 2021. People should keep this and any other IRS letters about advance Child Tax Credit payment with their tax records.
• Eligible families who did not get monthly advance payments in 2021 can still get a lump-sum payment by claiming the Child Tax Credit when they file a 2021 federal income tax return this year. This includes families who do not normally need to file a return.
• Individuals who did not qualify for the third Economic Impact Payment or did not receive the full amount may be eligible for the Recovery Rebate Credit, based on their 2021 tax information.  You will need to file a 2021 tax return, even if you don’t usually file, to claim the credit
• In early 2022, the IRS will send letter 6475 that contains the total amount of the third Economic Imapct Payment and any Plus-Up Payments, received. People should keep this and any other letters received for their tax records.
• Taxpayers who don’t itemize deductions may qualify to take charitable deduction of up to $600 for married taxpayers filing joint returns and up to $300 for all other filers for cash contributions made in 2021 to qualifying organizations.

To claim your child as a dependent, your child must meet either the qualifying child test or the qualifying relative test:

• To meet the qualifying child test, your child must be younger than you and either younger than 19 years old or be a “student” younger than 24 years old as of the end of the calendar year.
• There’s no age limit if your child is “permanently and totally disabled” or meets the qualifying relative test.

In addition to meeting the qualifying child or qualifying relative test, your child must also meet all other tests for claiming a dependent.

1. Dependent taxpayer test
2. Citizen or resident test, and
3. Joint return test

Yes, these benefits are taxable, even if you received them due to Coronavirus (COVID-19). Federal and state unemployment benefits are both taxable.

You must make estimated tax payments for the current tax year if both of the following apply:

• You expect to owe at $1,000 in tax for the current tax year after subtracting your withholding and refundable credits.
• You expect your withholding and refundable credits to be less than the smaller of:
  • 90% of the tax to be shown on your current tax year’s return, or
  • 100% of the tax shown on your prior year’s tax return, (Your prior year tax return must cover all 12 months.)

There are special rules for: 

• Farmers and fisherman
• Certain household employers
• Certain higher income taxpayers
• Nonresident aliens

Generally, to qualify for head of household, you must have a qualifying child or dependent. However, a custodial parent may be able to claim head of household filing status with a qualifying child even if he or she released a claim to exemption for the child.

Social security benefits include monthly retirement, survivor and disability benefits. They don’t include supplemental security income (SSI) payments, which aren’t taxable. The net amount of social security benefits that you receive from the Social Security Administration is reported in Box 5 of Form SSA-1099, Social Security Benefit Statement, and you report that amount on your income tax return (Form 1040, line 6a). The taxable portion of the benefits that’s included in your income and used to calculate your income ta x liability depends on the total amount of your income and benefits for the taxable year. You report the taxable portion of your social security benefits on Form 1040, line 20b or Form 1040A, line 14b.

To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of:

• One-half of your benefits; plus
• All of your other income, including tax-exempt interest.

The base amount for your filing status is:

• $25,000 if you’re single, head of household, or qualifying widow(er),
• $25,000 if you’re married filing separately and lived apart from your spouse for the entire year.
• $32,000 if you’re married filing jointly,
• $0 if you’re married filing separately and lived with your spouse at any time during the tax year.

If you’re married and file a joint return, you and your spouse must combine your incomes and social security benefits when figuring the taxable portion of your benefits. Even if your spouse didn’t receive any benefits, you must add your spouse’s income to yours when filing on a joint return if any of you benefits are taxable.

You can figure the taxable amount of the benefits in Are My Social Security or Railroad Retirement Tier 1 Benefits Taxable?, on a worksheet in the Instructions for Form 1040, Instructions for Form 1040A, or in Publication 915, Social Security and Equivalent Railroad Retirement Benefits.

It depends on the type of mistake you made:

• Many mathematical errors are caught during the processing of the tax return and corrected by the IRS, so you may not need to correct these mistakes.
• If you didn’t claim the correct filing status or you need to change your income, deductions, or credits, you should file an amended or corrected return using Form 1040X, Amended U.S. Individual Income Tax Return.

When filing an amended or corrected return:

• Include copies of any forms and/or schedules that you are changing or didn’t include with your original return.  To avoid delays, file Form 1040X only after you’ve filed your original return. Generally, for a credit or refund, you must file Form 1040X within 3 years after the date you timely filed your original return or within 2 years after the date you paid the tax, whichever is later.
• Allow the IRS up to 16 weeks to process the amended return.

In order to file proof of income the following is needed ( 1099 MEC, 1099 MISC, bankstatments, and receipts). To file proof of deductions this is needed ( cancel checks, other documents reflecting proof of payment/electronic funds transferred, account statements, cash register tape receipts, and invoices).