Hey Turbo Tax! Thanks for taking time to answer some questions:
1. We received $2,800 last month and we are curious why? We thought that we had already received all the 'back pay' for our kiddos when it came to stimulus money. So we just want to know where this money came from.
2. The Child tax credit is $300 per child/per month correct? How long are they doing this for? From now until December? Or even longer? And this money will just be 'deducted' from our overall tax return next year? So we are just getting that money a little earlier right?
3. Would there be any way to see a rough number of what taxes will look like for next year? Like how much that we need to withhold on our paychecks, to make sure that we don't have to end up paying during tax season?
Again Thanks for all you do!
Thanks for your gracious comments.
1. I recommend that you set up an IRS tax account to find out the nature of $2,800.
You can create an IRS tax account via this link:
Once created, under tab "Account home" > View tax records, it will show Economic Impact Payment amounts.
Under tab "Payment Activity", you can see estimated tax payments made for the current and prior years and others.
2. The Advanced child tax credit payments is an estimate based on the information from your 2020 return for tax year 2021.
For tax year 2021, the Child Tax Credit is increased from $2,000 per qualifying child to:
- $3,600 for children ages 5 and under at the end of 2021; and
- $3,000 for children ages 6 through 17 at the end of 2021.
IRS is sending out 50% of estimated amount from July to December. Therefore, for child age 5 and under, it is $3,600/2/6 = $300 per month, totaling $1,800 for each qualifying child.
Yes, the received amounts will deduct/offset the total child tax credit available when you file the tax year 2021 tax return. Yes, this is an advance payment. Receive some during 2021, and lesser amount when filing 2021 tax return. Or receive $0 now, and get full credit amount when filing 2021 tax return.
3. TurboTax Income Tax Calculator 2020
Or using TurboTax Online current version 2020 with a different user ID (for test only) for estimate purpose;
or wait until late November/December when TurboTax Online 2021 is available.
Hope the above helps.
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IRS 3rd Round Stimulus Info
More details on the 3rd Stimulus
You can check it here,