BUSINESS + ECONOMY
When is the right time for parents to drop children off their taxes?
SALT LAKE CITY — With tax day fast approaching — deadline is April 18 — when can parents no longer claim their children as dependents? A tax expert answers those questions and more.
Dave & Dujanovic are also talking about what happens if you end up owing more on your taxes than you anticipated.
Don’t wait on hold for hours
Susan Spiers, CEO of the Utah Association of CPAs, joins the show to share her insight.
This year, Debbie said she owed the government “a ton of money.”
“Is it too late for those folks like me who just find themselves with this massive tax bill to call the IRS and say, ‘Hey, can we make a deal?'” Debbie asked.
“No, it’s not. In fact, I would suggest that rather than call the IRS and sit on hold for several hours, just hop online, go to the IRS website,” Spiers said. “You can apply for a payment plan online.”
What about the kids?
The IRS defines a dependent as a qualifying child under age 19 (or under 24 if a full-time student) or a qualifying relative who makes less than $4,300 a year (tax year 2021). There’s no age limit if your child is permanently and totally disabled. Your dependent child must live with you for more than half the year, but there are exceptions.
Dave said he receives a tax credit of $2,000 a year per child.
“Doesn’t that disappear at a certain age, even if you do claim them?” he asked.
“Yeah because the child tax credit, that goes till they’re 17,” Spiers said. “Now, if they’re going to school, you may want to claim them because then you have education credits that you could take on your tax return if you’re claiming them as a dependent.”
Spiers added that if you have an IRA, you can add any contribution up until the tax deadline of April 18.
“This year, the filing deadline is the 18th because Good Friday is on the 15th, so so we get to we get an extra few days,” she said. “CPAs don’t like it because we’re working another weekend.”
Child Tax Credit
Under the American Rescue Plan of 2021, advance payments of up to half the 2021 Child Tax Credit were sent to eligible taxpayers.
Spiers said those advanced payments have thrown off some people this tax season.
“If you’re planning for that big refund and then all of a sudden you got half your child tax credit during the year, that refund isn’t going to be as big so be aware of that.”
Dave agreed, saying there have been wrinkles in tax filings during the past few years.
“We used to be able to rubber stamp it and just kind of blast through it. But with the child tax credits, the stimulus money, there’s so many things that have happened in the last couple of years, I think everyone’s just a little unsettled and not quite sure what to do.”
Dave & Dujanovic can be heard weekdays from 9 a.m. to noon. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app, as well as Apple Podcasts and Google Play.
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