In Legal Terms
In Legal Terms: Tax Changes
What’s up with income taxes for 2020? We’ll talk about how to get them done, what’s new, and what do you think is fair.
Federal and Mississippi Income Taxes due date and file date is now May 17th, 2021.
Where can you find someone to help you do your taxes?
- https://southernpartners.org/vita/ Southern Bank Corp banks: Curbside service is available Tuesdays & Thursdays, 9AM – 4PM. Call your local branch for details on contactless (email) tax preparation. Here’s a list of cities with Southern Bankcorp branches: Clarksdale, Drew, Greenville, Hattiesburg, Madison, Picayune, Ruleville, Shelby
- Mercy Housing Development in Gulfport
- Entergy, has some locations where they will help you file your taxes: https://eitclocations.com/ - these are in Clarksdale and Shelby
- The United Way also offer VITA. Call the organization that serves your area.
- If you or a friend has access to a computer: https://www.irs.gov/individuals/find-a-location-for-free-tax-prep
Families in the U.S. and territories qualify for the newly expanded CTC. Joint filers making up to $150,000, single head of households making up to $112,500, and other single filers making up to $75,000 qualify for the full advanced periodic payment of the CTC. In a very positive change from the current law, the expansion of the Child Tax Credit in the American Rescue Plan means that you do not have to be employed to receive the benefit; even families who have no income at all will be eligible.
If you are unmarried and earn less than $112,500 per year or are married and your household income is less than $150,000 per year, you will receive $3,600 per child under six years old and $3,000 per child age six to 17. Estimates project that families will receive about $300 per child for children under six, and $250 per child between ages six and 17, for each periodic payment.
So, for example, if you have one child, aged seven, you will receive $3,000 over the course of a year, or $250 per month.
The cash benefit begins to reduce by $50 for every additional $1,000 of income earned. Higher-income families who previously qualified are still eligible for the $2,000 per child benefit for individuals making up to $200,000 and joint filers making up to $400,000. Meaning, they will not receive less than what they previously did under current law.
Tax Changes that are proposed for the current congress:
- The top individual federal income tax rate would rise from 37% to the pre-Trump rate of 39.6%.
- The corporate rate would rise from 21% to 28%; a 15% alternative minimum tax would apply to corporate book income of $100 million and higher.
- Individuals earning $400,000 or more would pay additional payroll taxes.
- The maximum Child and Dependent Tax Credit would rise from $3,000 to $8,000 ($16,000 for more than one dependent).
- Tax relief would be offered for student debt forgiveness and the first-time homebuyers’ credit would be restored.
- The estate tax exemption would drop by about 50%.
File your taxes for free: https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free
Income $72,000 and below:
- Free federal tax filing on an IRS partner site
- State tax filing (free with some offers)
- Guided preparation – simply answer questions
- Online service does all the math
Income above $72,000:
- Free electronic forms you fill out and file yourself
- No state tax filing
- You should know how to prepare paper forms
- Basic calculations with limited guidance
The most popular software makers are Turbo Tax, H&R Block, TaxAct and TaxSlayer. They each have a free version, a Deluxe or Classis version, a Premier, and a Self-Employed version.