HOUSTON – It is time to tackle your taxes. By now, you should have received all of your 2020 tax statements and documents.
We know last year was rough financially for a lot of people. You should know there are some things you can do when you file your taxes to keep more money for you and your family.
Use lower-income to your advantage
Many people either lost jobs in 2020 or had their work hours and pay significantly reduced. You can use that to your advantage because this year, the IRS will let you use the income that gets you a larger earned income tax credit. If you are eligible for the EITC, the more money you make, the higher the credit you will get. The credit ranges from $538 to $6,660, depending on your filing status and how many children you have. If you had a higher income in 2019 than in 2020, you can use your 2019 income to get the higher amount in the EITC the child tax credit.
Babies born in 2020 will get you $500
If you had a baby in 2020, you’ll get an automatic $500 that others collected with their stimulus payments. The IRS wouldn’t have known about the child when they sent your stimulus payment, but when you claim them on your taxes, you will get the $500.
New charity deduction
You usually have to itemize your taxes to claim donations to charity to get a deduction, but this year, if you gave up to $300 you can put that directly on your tax form 1040, and it will reduce your income before taxes are charged.