It’s October. I know I say this every month, but wow, this day got here quickly. And it’s just the start of a busy month.
This first full month of fall means it’s time to winterize your house if you live in a place with changing seasons.
You’ve got candy to buy so trick-or-treaters won’t be disappointed. But take it from me, don’t buy the sweets too soon or you’ll have to buy more by the time Oct. 31 arrives.
And you need to take some tax actions this October.
This year, some special COVID-related tax changes demand added attention from many taxpayers, with one of those deadlines is just around the corner, I mean weekend. So let’s get started on some October tax moves.
1. Opt out of Advance Child Tax Credit payments: Millions have been happily accepting the monthly Advance Child Tax Credit (AdvCTC) amounts that the Internal Revenue Service has been distributing since July.
The amount was increased for 2021 to help, among others, folks hit hard by coronavirus caused job losses. The law change also called for half the applicable tax credit amounts to be sent out this year, so that folks could use the money now instead of waiting to claim the tax credit next year when they filed their taxes.
But some need to reassess their AdvCTC payments. If they find they’d be better off tax-wise stopping them, that ending action has an October deadline. And it’s soon. Like Monday, Oct. 4, soon.
Regular readers might remember that I just noted this AdvCTC unenrollment deadline in my most recent By the Numbers post. That Sept. 26 item looked at a key reason why some folks might choose to pass on these early Child Tax Credit amounts, specifically that their family situations have changed and they’re no longer eligible for the amount they’re getting based on prior year filing data. That means the payments, in part or full, might have to be repaid when they do their taxes next year.
If this is your case, quit procrastinating and stop these early payments this month. Again, by Monday Oct. 4. Or sooner. Even though it’s relatively to do so using the IRS’ online Child Tax Credit Update Portal, it can take the agency some time to process your request. So get to opting out as soon as possible.
2. Sign up for the AdvCTC payments: If, however, you’ve yet to get any early Child Tax Credit payments for which you’re eligible early, then you also need to act. Soon. This is the case for, according to a report from the Center on Budget and Policy Priorities, some 4 million children in low-income households.
Those families haven’t made enough money to require them to file taxes in recent years. But those filings are what the IRS is using to distribute AdvCTC amounts.
If this is you, to ensure you get your possible $1,800 per child in AdvCTC payments this year — that’s the maximum $300 for a child younger than age 6 multiplied by six months of early payments, or half of the maximum total $3,600 per child thanks to the enhanced Child Tax Credit — file a simplified tax return using, you got it, IRS’ online Child Tax Credit Update Portal.
3. File your 2020 tax return: OK, all y’all readers with older children not eligible for the Child Tax Credit or, like me, no kiddos, I haven’t forgotten about you. Neither has the IRS. The Oct. 15 deadline is the big day for most people who got an extension to file their 2020 tax returns.
That deadline as I type is just two weeks away. Miss it and the tax agency will start tacking on late-filing penalties for not getting your paperwork in on extended time. And if you didn’t pay any or enough tax due when you filed for extension months ago, penalties and interest on that unpaid amount has been accruing since May 17.
Remember that the IRS/Free File Alliance partnership of Free File is still available. This year, nine tax software companies are online for your no-cost filing use as long as your adjusted gross income is $72,000 or less.
4. Make sure Oct. 15 is your extended filing deadline: Careful readers noticed that in October Tax Move #3 I noted that Oct. 15 is the extended filing deadline for most taxpayers who earlier sent the IRS a Form 4868 to get more time to fill out their 2020 return paperwork. Most is the key word.
When taxpayers face extraordinary events, they usually get even more time to file. But the situations that allow this added time tend to be far from ideal.
Members of the military serving in combat zones can get an extra 180 days from their last day in those dangerous areas to file their tax returns. You can get more information at the IRS web page on combat zone service extended deadlines and IRS Publication 3, Armed Forces Guide to Taxes.
People who’ve been through a major disaster also usually are provided extra time to file. That’s the case for some individuals and business owners in the wakes of 2021’s myriad major disasters. The extended deadlines are:
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Taxpayers affected by natural disasters can find more in my post on claiming disaster losses, as well as in IRS Publication 547, at the IRS’ Tax Relief in Disaster Situations special web page (click on the 2021 link for latest disaster/tax news) and the ol’ blog’s Storm Warnings collection
Make other October tax moves: If any of these actions or deadlines apply to you, make them this month. And definitely by the appropriate deadline(s).
And if you’re looking for more October Tax Moves, you can find some over in the ol’ blog’s right column. This month’s list is in its usual place, noted by the bright read headline just under the digital clock counting down to the even closer Oct. 15 extended filing deadline.
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