Important Information about Child Tax Credits

Important Information about Child Tax Credits

by | Jul 15, 2021 | Archives, Blog Posts

The advance payments of child tax credits is set to begin today, July 15th. As you may have heard, the IRS will pay half the total credit amount in advance monthly payments and you will claim the other half when you file your 2021 income tax return in 2022. Here is an overview of the child tax credit and how it will work.
ELIGIBILITY
Eligibility for the child tax credit is subject to income limitations and determines how much you will receive.   Single taxpayers earning $75,000 or less, heads of household earning $112,500 or less per year and married couples earning less than $150,000 per year all qualify for the full credit. For people with higher incomes, payment amounts phase out at a rate of $50 for every $1,000 over each of the aforementioned thresholds.  While there are income limitations to determine eligibility, there is no limitation on the number of children claimed as dependents.
CREDIT AMOUNTS
36 million US households qualify for the child tax credit payment which amounts to: up to $3,600 for children ages 5 and younger, up to $3,000 for each child who is between the ages of 6 and 17, $500 for each dependent who is 18 years old, and $500 for full-time students between the ages of 19 an 24. If you had a baby in 2021, your newborn qualifies for the child tax credit payment of $3,600.
TIMING
The timing of these payments is different from previous stimulus payments as most taxpayers will receive half of the total amount monthly for 6 months, starting July 15, 2021. Then, in 2022, the second half of the credit will be applied to the amount you owe on your 2021 taxes (which you file in 2022). Hence, the reason it is called a “child tax credit.” Your tax liability for tax year 2021 will be reduced by the “credit” you gain from your eligible dependents which will either decrease the amount you owe to the IRS or increase your tax refund.
PAYMENTS
The IRS is targeting automatic payment dates of July 15, August 13, September 15, October 15, November 15, December 15 and April 2022 for those who filed their 2020 tax returns by the extended tax deadline of May 17, 2021.
If you didn’t file taxes in 2020, share custody of your children, would prefer to opt for one big payment or opt out of the program entirely, click here to visit the IRS website as it contains several helpful links.
As always, we here to answer any questions you may have. Please call the office at (800) 560-4637 to speak with us about your individual situation.
Wrentham Rockets Softball Champions!!

Wrentham Rockets Softball Champions!!

by | Jul 6, 2021 | Archives, Blog Posts, In The Community

The Wrentham (WYBSA) Rockets of the Major League Division are 2021 Champions!! The team is sponsored by NFS and coached by NFS President Jeff Schweitzer. Congratulations to the Wrentham Rockets who had an awesome regular season going 10-2-1 and finished strong with 2 more wins in the playoffs beating the Plainville Tigers in the semi-finals 9-6 and the Norfolk Jayhawks 12-2 in the championship game! Way to go girls and coaches 🥎

Smart Money Management Tips for Young Adults

Smart Money Management Tips for Young Adults

by | Jul 1, 2021 | Archives, Blog Posts

If you pay much attention to social media, you’ve probably noticed the trending memes about “adulting.” They can be pretty funny, but they also make young adulthood look a little scary. In reality, being a young professional is an exciting time. And adulting doesn’t have to be so hard — or scary — when you have the knowledge it takes to set yourself up for success, especially when it comes to making sound financial decisions.

 

Start Investing Now!

 

One of the most common mistakes that young professionals make is the assumption that investing takes more money and experience than they have. You don’t want to invest blindly, of course, but that doesn’t mean you can’t learn enough to start making smart investments now. If you aren’t sure where to start, contact Northeast Financial Strategies for investment guidance, and check out a resource like Money Under 30 for a primer on investing basics like mutual funds, bonds, and robo-advisors.

 

In addition to stocks and bonds, real estate is another investment option young adults should consider. Any property you buy is technically an investment, but real estate investing as a growth strategy usually means buying a property that you either rent or fix and sell for a profit.

 

Like any other investment, real estate has the potential for positive outcomes along with possible drawbacks. For young people, one advantage to real estate is that it doesn’t require a great amount of capital. The rental market is also a sustainable business model with the potential for regular passive income. The possible downside is that financing your property does require a certain amount of money. What’s more, if you aren’t up for the task, handling maintenance, marketing, and everything else it takes to be successful can become a burden.

 

Adopt Money-Smart Habits

 

Saying it’s important to manage money wisely may seem like a no-brainer, but actually doing this takes effort. To begin, make sure you’re familiar with money management basics like setting a budget. You may even want to use a budgeting app. Once you have the basics down, focus on adopting other money-smart habits that will protect your finances now and for the future.

 

Spend Less

One of the best long-term habits to adopt is to live frugally. Doing this doesn’t mean leading a life of denial; instead, it’s all about learning to make informed decisions about purchases. Try some of our favorite money-saving tips from Young Adult Money, including shopping habits like choosing generic brands and using coupons. It may not seem like saving a dollar here and there is such a big deal, but small savings add up, especially when you start early.

 

Save More

The natural result of spending less is that you have more money left over to save. In addition to investing, young adults should also set savings goals. These should always include creating an emergency fund and saving for retirement, but you may also have other specific goals like saving to start a family or buy a house.

 

Build Credit Wisely

Another top financial goal for young adults should be to build your credit history. This is important because having a good credit score can make a difference in other financial decisions like getting a car or home loan. To make sure you do this without incurring debt, brush up on credit card best practices, which include finding a card that’s low-interest and low-fee and always paying off your balance. It’s also important to know what kind of things damage your credit. One key example is how your credit score takes a hit anytime you pay bills late, which is why CNBC money experts recommend setting up automatic bill pay.

 

“Adulting” may be a recent concept, but learning smart money management is something every generation of young adults has to do (or at least, should do). The great thing for today’s generation is that technology has made this easier than ever, with tools like automatic bill pay and budgeting apps. With a concerted effort, commitment to using these tools, and guidance from Northeast Financial Strategies, getting started on solid financial footing doesn’t have to be hard or scary!

 

Photo credit: Pixabay