Attention N.H. procrastinators: Here are tips for filing your taxes ahead of April 18
There are a few days left until Tax Day. And if you haven’t even started filing, you are not alone. But we recommend getting started ASAP, as this past year included several federal pandemic relief efforts, like the third stimulus check and expanded child tax credit that can make a difference (and require a little extra time) when filing this year.
Make sure you file if you want to receive the second half of the child tax credit, or receive the full amount
Many New Hampshire residents received advance payments from July to December of 2021. To get the second half of the child tax credit, Valdes says you must file this year's tax return. If you didn’t get the advance payments, you need to file to get the credit in full.
The IRS sent a letter to those who received half of the credit stating how much they paid you. If there’s a difference between the number listed in that letter and what was deposited to you, or given to you via check, Valdes recommends filing taxes with the number the IRS said.
“After you get your refund, you can call [603 Legal Aid] and we can help figure out how to manage,” she said.
And if you had a child last year at any point last year, this credit also applies to you. You can still receive the full amount of the credit.
If you received unemployment benefits in 2021, you still have to pay taxes
For 2021, all unemployment benefits are taxable. You should receive a Form 1099-G indicating how much you received and use the figures included there as you file like you would a W-2. You can use this interactive tool on the IRS website if you’re unsure about whether to include a payment in your filings.
For small business owners, tracking costs is key.
“Keep your receipts,” Valdes said. Because the tax code for businesses is different, Valdes underscored the need to maintain a documentation system for everything that could be deducted as a business expense.
“A lot of the problems we see with self-employment is that it's just they don't know [their expenses] because they're too busy trying to run this business,” she said.
Tl;dr: Stop shoving your receipts into a pizza box and figure out a way to sort them.
Valdes suggests small business owners pay their taxes quarterly, and either invest in an accountant or a tool to organize those expenses.
Get help: Find a free tax preparation site
If you’re confused by your taxes, you can likely get help. There are almost 50 sites in New Hampshire that offer free prep. There are three formats: some are drop-off, where you have a 15-minute appointment and leave your documents with volunteers who prepare your return. A later appointment is scheduled for you to pick up your complete and electronically filed return at a later date. Others are in-person, where your return is completed with you present. And the third type is while-you-wait. Your taxes will prepare your return while you wait outside of the tax preparation room.
You can schedule these appointments either online or by calling 211.
For these volunteer income tax assistance (VITA) sites, there's an income limit of $58,000. Free tax prep via the IRS website is limited to incomes of $73,000 or less, but for free help through AARP, there is no income limit.
Key documents to bring to these clinics:
Bring documents that show your earnings for the year, like W-2s or 1099s, as well as Social Security numbers for you and all your dependents, or your ITIN, depending on how you’re filing. Also, bring the previous year’s filings and identification. Have your routing number and bank account number for direct deposit handy.
You can find a full list of documents to bring here.
How does immigration status affect filings?
If you work in the U.S., you have to file taxes. But if you don’t have a Social Security number, you can use an ITIN (individual taxpayer identification number) to file.
If you don’t work, and your children do have Social Security numbers, you should still file your taxes to receive the child tax credit since last year’s guidelines did not require an income to receive these benefits.
Valdes says she knows it can be worrisome for people to file, but says the IRS isn’t checking the immigration status of people who file or the status of their dependents.
“They care that you're doing your due diligence and you're putting in your taxes,” she said.