The IRS announced late last year and has started mailing two separate information letters that we will need to complete your taxes this year.  Some of you have already received these letters and have called our office, so we wanted to let everyone know what these letters are about and what you need to do with them.

What These Letters Are:

The letters are new and are used on your 2021 tax returns to reconcile the advanced payments received for the Advanced Child Tax Credit payments and the third round of Economic Impact Payments (also known as Stimulus payments).  A lot of taxpayers had delays in the processing of their tax returns and receipt of their refunds due to inaccurate reporting of the first and second stimulus payments received in 2020.  To help avoid this, the IRS is issuing the following two letters to recipients of stimulus checks and/or the advanced child tax credit.

• Letter 6419, contains the amount of Advanced Child Tax Credit payments received by the taxpayer for 2021 and the number of qualifying children used to calculate the advanced payments.
• Letter 6475, contains the amount of Economic Impact Payments received by the taxpayer for 2021, including initial payments and any “plus-up” payments received.

“Plus-up” payments were additional payments the IRS sent to taxpayers who received a third Economic Impact Payment based on a 2019 tax return or information received from the Social Security Administration, Railroad Retirement Board, or Department of Veterans Affairs. Plus-up payments were also made to taxpayers who may have been eligible for a larger payment based on their 2020 tax return.

What To Do With These Letters:

Please bring these letters to your tax appointments or if you are mailing in your information please include copies with your other tax documents.  These letters will be used to reconcile the advanced payments received on your tax returns.

Failure to provide these letters may not affect the filing of your tax return BUT will impact the processing time of your returns which will result in slower refunds.  Many of you have already been impacted by IRS pandemic-related delays and we want to help out here by being proactive and informing you of the importance of these letters to avoid these unwanted delays.

Get Expert Tax Advice

There’s a lot to think about when it comes to tax planning. That’s why it often makes sense to talk to a tax professional who can evaluate your situation and help you determine if any year-end moves make sense for you.

Contact Lake Stevens Tax Service or call us at (425) 334-8138 with any questions about these important tax tips that you can use now to save money!