The third financial affect cost, or EIP3, and advance youngster tax credit score funds have added to the ever rising checklist of uncertainties when making ready 2021 tax returns. As filers and accountants get able to file, we have now outlined just a few issues to look out for.
What EIP3 and advance youngster tax credit score funds have your purchasers acquired?
OK, that is the place issues begin to get complicated. In December and January, the IRS despatched out Letter 6419 which included the whole quantity of 2021 advance youngster tax credit score funds, in addition to the variety of qualifying youngsters used to calculate these advance funds. This letter was meant to assist taxpayers reconcile youngster tax credit score quantities. Nevertheless, there have been studies of Letter 6419 displaying inaccurate advance youngster tax credit score cost quantities, as reported by Accounting At present.
The IRS has additionally launched a web site for the kid tax credit score with up to date quantities for taxpayers to make use of on their 2021 tax returns. Potential inconsistencies between Letter 6419 and the kid tax credit score web site may create pointless confusion, by which case pulling IRS transcripts is a superb resolution.
One other cost to look out for on 2021 returns is the third financial affect cost. The IRS has indicated that some people have acquired multiple EIP3 cost. As tax season looms, the EIP3 is one other place to search for potential inconsistencies. A great way to confirm IRS funds is by pulling transcripts, each within the case of EIP3 funds and advance youngster tax credit score funds that taxpayers could have acquired for his or her 2021 returns.
Use IRS transcripts to reconcile funds
Pulling IRS transcripts is a robust solution to view and confirm exercise in your consumer’s tax account, together with EIP3 and advance youngster tax credit score funds. There are a number of the way to realize this, together with immediately by means of the IRS. Nevertheless, tax season generally is a difficult time to name the IRS with excessive tax season volumes.
Cover has constructed an answer that permits you to rapidly and securely pull, set up, and retailer IRS transcripts. This award-winning transcript instrument can be utilized to reconcile advance youngster tax credit score and EIP3 funds by verifying the quantities the IRS issued. It’s also possible to get visibility into whether or not a cost test was returned to the IRS as undeliverable. And the transcript instrument delivers transcript studies which are simple to learn and digest with actionable suggestions.
In the event you’re already utilizing Cover, however not using the transcript instrument, right here is a superb place to begin studying how.
Not an present Cover buyer? Schedule a demo to study extra in regards to the transcript instrument and the way it can save time and complications on your agency.
