New Hanover offers free tax preparation, IRS highlights 2021 changes
NEW HANOVER COUNTY — Every year during tax season, New Hanover County offers free assistance to those in need of help to file with the IRS.
Starting Monday, Jan. 31, New Hanover County has opened three locations for filers to drop off paperwork through Apr. 8. Assistance is provided at the Senior Resource Center, the downtown library and Carolina Beach Community Center, and is open to anyone regardless of age.
Due to Covid-19 precautions, no in-person appointments will be offered. Trained and IRS-certified volunteers will accept dropped-off tax information and all necessary documents, to limit contact.
As the pandemic continues, the IRS has reported some changes for the 2021 tax season.
Child tax credits have increased from $2,000 per child in 2020. Eligible parents will receive $3,600 per child ages 5 and younger and $3,000 per child ages 6 through 17. It applies to people who make less than $75,000 for filing alone; less than $112,500 for head-of-household; and less than $150,000 for married couples jointly filing. For those earning more, the credit is progressively reduced.
Taxpayers who earned advanced child tax credit payments should have received a document titled “Letter 6419.” Under the American Rescue Plan, advanced payments of up to half the 2021 credit were sent to eligible parents. Those who did not receive advance payments can claim the full credit on their tax returns and those who received half are eligible for the remaining funds.
Taxpayers who received a third stimulus payment of $1,400 — doubled to $2,800 for married couples — should have acquired Letter 6475 to indicate the payment was obtained. Those who did not receive a payment can claim the missing money on their 2021 taxes as a recovery rebate credit.
Also changing is the standard deduction, increasing $150 from 2020 to $12,550 for single filers and married couples filing separately, and $18,800 for heads-of-household. The standard deduction is going up by $300 to $25,100 for married couples filing jointly. Filers ages 65 and older can tack on an additional $1,350 per person if married or $1,700 for household heads and singles.
Also, seniors who have turned 72 by the end of 2021 are required to withdraw a minimum amount (which varies based on the account balance and an IRS formula) from retirement accounts by Apr. 1, 2022. In 2020, the CARES Act paused this forced distribution. If the money is not withdrawn, the IRS will charge a 50% tax on the money that was supposed to be retrieved.
Some changes from previous seasons will carry over this year as well. As part of the Covid relief bill signed in March 2021, student loan debt forgiveness or employer assistance is not considered taxable income. This perk is expected to last through 2025.
As well, unreimbursed medical expenses up to 7.5% of a filer’s adjusted gross income are tax deductible. To qualify, a taxpayer needs to itemize deductions. This went into effect starting in the 2019 season and is intended to remain through 2025.
In 2020, charitable deductions were changed, allowing a $300 contribution deduction per tax return on top of the standard deduction. This will continue into 2021; married couples can claim up to $600. The Coronavirus Aid, Relief and Economic Security (CARES) Act also raised charitable contributions to equal 100% of a person’s adjusted gross income, up from 60%.
The IRS recommends taxpayers file electronically for the best results; most are processed within 21 days. Choosing direct deposit for refunds also mitigates delay.
However, those claiming an earned income tax credit or child tax credit may experience hold-ups mainly because of the regulations in place to help prevent fraud. The department of revenue began processing returns on Jan. 24; taxes or an extension must be filed by Apr. 18.
Free filing is eligible through the IRS for a person or family who earned $73,000 or less.
New Hanover County will accept paperwork at three locations to help residents file their taxes:
- Senior Resource Center, 2222 S. College Rd. — Appointments required by calling 910-798-6416 or filing online
- New Hanover County Downtown Library, 201 Chestnut St. — Appointments required by calling 910-798-7341
- Carolina Beach Community Center, 200 Cape Fear Blvd. — Appointments are not required. Residents can walk in from 2 p.m. to 3 p.m. on weekdays and 9 a.m. to 10 a.m. on Saturdays
Have tips or comments? Email firstname.lastname@example.org