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Tax season is back. We all have to file tax returns. Yes, again 😂. The deadline to submit your tax return or apply for an extension is Monday, April 18, 2022, instead of the usual April 15 deadline, because of a federal holiday.
Here are the tax brackets for individuals and married couples in 2021, adjusted for inflation:
The standard deduction for this tax season is $12,550 and $25,100 for married couples.
In July 2021, the Child Tax Credit has increased as a part of the American Rescue Plan to $3,600 for children below 6 years old, $3,000 for those between 6-17. You might have already received half of your benefits as monthly payments, and you can expect to receive the remaining part after filing your tax return this year. Make sure you fill out Schedule 8812 to qualify.
If you have federal student loan, you also may quality for partial interest deduction if you paid at least $600 in interest.
It is entirely up to you if you are going to fill out tax returns yourself, use a software like TurboTax or Sprintax (software for nonresident aliens, inc. international students), or work directly with a tax professional.
If you’re an international student, make sure you read all of the regulation, tax treaties between the US and your county of origin. You may qualify for Sprintax discount through your university - make sure you get in touch with the International Student Office to check.
There is still time to file Form 4868 which gives you automatic 6-month (or 2-month if you’re outside of the US) extension of time to file Individual Income Tax Return. At the time of filing this form, however, you need to pay the estimated income tax you might owe this year. Make sure you apply before April 18, 2022 if you want to extend your deadline.
Once you finally get your tax return, be smart about how you allocate it towards your savings, debt repayments to maximize its potential.
Some questions to consider:
Have a look at the chart below to get some guidance on how to allocate your return:
Although the deadline is fast approaching, take your time to avoid errors and omissions!
Good luck 🤞
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