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This article is posted with permission from our partner Lili. Get the digital bank account designed for freelancers with Lili and manage your business expenses, estimate your taxes, and save for a rainy day all with zero account fees. Start a Lili account today. Last month, families all over the country started receiving the Biden administration’s monthly advance payments from the new child tax credit (enacted by the American Rescue Plan), which allocates up to $300 per child a month. The CTC comes in the form of monthly payment. Since we’re already halfway through 2021 (if you can believe it), only half the year’s payments will be doled out over the course of the next six months and you can claim the rest when you file taxes next year. Excitingly, the CTC used to be just for those earning at least $2,500 a year (you needed to owe some federal taxes to be able to receive the credit), but for those of you who still haven’t quite yet gotten back to the grind, you will also receive payment for you and your children. Get your payment 2 days earlierThe best news is that if you bank with Lili, that money could be deposited into your account two whole days earlier, each & every month. All you gotta do is enroll in direct deposit through the IRS Child Tax Credit Update Portal with your Lili Account. You can find your Lili routing and account number in the menu of your Lili app, right below your name. If you’ve already enrolled in direct deposit with another bank but want to move your deposits into your Lili account, no worries: you can update your bank account information to receive future payments on the same IRS portal. What if your income has increased?This is all great news, but as freelancers, there is one super important detail to keep in mind. Remember when we said these payments are based on your 2019/20 tax returns? As NPR mentions, “if your family’s income [is] above $75,000 for single filers, $112,500 for head of household, or $150,000 for married couples filing jointly, your child tax credit begins phasing out.” Freelancers and side hustlers know all too well that our income can drastically fluctuate from year to year, often growing as we build our network, expand our business, and become even better at what we do. This means, if it’s looking like your gross net income is going to be above the limit, you may want to consider opting out of the monthly payments and only claim what you are actually eligible for next tax season. via Freelancers Union Blog https://blog.freelancersunion.org/2021/08/23/what-the-child-tax-credit-means-for-parent-freelancers/
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AuthorI have 5+ years experience working as a medical transcriptionist. When I am not working, I enjoy sports like playing basketball or judo. I love making friends and connections. Archives
April 2023
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