Tax Update

2021 Year-End Tax Update & Newsletter

Season's Greetings! Tax Year 2021 is right around the corner, here's the latest news for you.

Charitable Contributions

In 2021, a $300 charitable contribution deduction is allowed to be taken for single filers even if not using itemized deductions. For married filers, a $600 deduction can be taken even if you are taking the standard deduction. This is a reminder to please bring in at tax time documentation of any charitable contributions even if you do not normally use itemized deductions.

Unemployment Compensation

Unlike in 2020 when up to $10,200 of unemployment compensation was nontaxable, in 2021 all unemployment compensation is taxable.

Child and Dependent Care Credit (DCC)

In 2021, you can claim up to $8,000 of dependent care expenses for one qualifying dependent and receive a 50% tax credit, with the maximum credit being $4,000
If you have more than one qualifying dependent, the maximum qualifying expenses is $16,000 with up to 50% being eligible for a tax credit, resulting in a maximum dependent care tax credit of $8,000
You can only receive this credit if both you and your spouse are working and have adjusted gross income less than or equal to $125,000

Ohio Municipal Tax

If you worked from home during 2021, but your employer still withheld municipal tax you may be eligible for a refund of the tax paid on your behalf. Please let us know if you worked from home and how many days you worked from home when we prepare your taxes - Please mark this on your tax questionnaire you will receive in the mail.

Child Tax Credit (CTC)

In 2021, you can get up to $3,600/child (ages 5 and under) and up to $3,000/child (ages 6-17).

To receive the full tax credit, a taxpayer's adjusted gross income must be under $75,000 (Single); $150,000 (Joint); or $112,500 (Head of Household).
The IRS will require payments received between July 2021 and December 2021 to be reported on your tax return.
In January, the IRS will be sending out Letter 6419 to individuals who received advanced child tax credit payments in 2021.

Verhoff and Company will be requesting that you bring in a copy of Letter 6419.

If you do not bring in a copy of Letter 6419, Verhoff and Company will be requesting that you set up an IRS account which shows the amounts received for Advanced Child Tax Credit Payments and Stimulus payments. The steps to set up an account are as follows:

Go to Internal Revenue Service | An official website of the United States government (irs.gov)
Click on "View Your Account" -> Log in to your Online Account
If you have an account, you can Log In. If you need to Create an Account, click on Create Account and follow the steps.
To create an account you will need the following information: Full Name, Email, Birthdate, SSN or Individual Tax Identification Number, Tax filing status in the most recent year (Single, MFS, MFJ, etc.), Current Address, and a personal identifier such as Credit Card Numbers or a Mortgage Account Number
Once logged in, the "Tax Records" tab will list the amount of stimulus payments received. Verhoff and Company is requesting that you print off the IRS page listing the stimulus amounts received.
Once logged in, the "Account Home" tab has a link to the Child Tax Credit Update Portal. If you click on the link it will take you to an IRS page listing the Advanced Child Tax Credit payments received in 2021. Verhoff and Company is requesting that you print off the IRS page listing the Advanced Child Tax Credit amounts received.

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Income Tax Brackets for 2021 Tax Rates

Standard Deductions

Mileage Rates

Key Retirement Plan Limits

20 Year Anniversary Event - Come Join Us on June 9th, 2022

20 Year Anniversary Event

When: Thursday, June 9th 11am-6pm

Where: Verhoff and Company Parking Lot

You're invited! Mark your calendars!

Verhoff and Company is celebrating 20 years of service to our clients, come help us celebrate!

There will be food, drinks, games, free goodie bags, raffle prizes and a 50/50 with the proceeds going to a local charity.