$1,400 Stimulus Check
We need to know if you received a $1,400 stimulus payment in March of 2021. It is possible you did not qualify for the stimulus at the time but, you may qualify now if your finances have dramatically changed or if your dependency status changed.
The February 2021 snowstorm caused a lot of damage in Texas. So much so that a Federal Major Disaster Declaration was issued for the state. What this means for you is that any expense you incurred to cover damages, that were NOT covered by insurance, is deductible on your taxes. For example, your water heater broke as a result of the freezing temperatures in February, and it cost $1,000 to replace. If your home insurance covered $600 of the replacement, the remaining $400 would be deductible. For more information see IRS Publication 547: Casualties, Disasters, and Thefts
Is your child still a dependent? Are you a dependent? Currently, the law states that if your child lives with you and you are paying for more than 50% of your child’s expenses then, they can qualify as a dependent until the age of 19. If they are in college, they can be a dependent until the age 24. Some relatives can also qualify to be dependents; this is most common with aging parents. Take the IRS quiz to find out if your child or relative qualifies as a dependent.
Child Tax Credit
The American Rescue Plan Act of 2021 temporarily changes the rules around the child tax credit. The new rules allow parents to receive their tax credit as monthly payments instead of one big credit on their taxes. You can opt out of these monthly payments if you prefer. Other changes to the child tax credit include 17-year-old children now qualify for the credit, the credit is raised to $3,000 per child ($3,600 for children under 6), and the earning floor has been removed. Visit the IRS webpage to check your eligibility and manage payments.
Cryptocurrency profits are taxable as capital gains. Cryptocurrency received as payment for work or services is taxable as income. In short, cryptocurrency is taxable like stock or cash, depending on how it is used.
Get all your questions answered at: Publication 544, Sales and Other Dispositions of Assets. Publication 525, Taxable and Nontaxable Income.