Post by purplepenguin7 on Jun 22, 2021 13:32:54 GMT -5
thank for sharing the link! Can I ask a general question about this? I think we are going to opt out because we were just under the 150k threshold in 2020. I sold a stock earlier this year that will push us over 150K for sure. Also, I believe I will need to pay capital gain on the sale. I am worried that if we take the credit monthly, and then file for 2021 and are over the limit we will end up owning both capital gains, more taxes on a higher income, and owe back some of the credit. Can anyone confirm if I am understanding this right?
thank for sharing the link! Can I ask a general question about this? I think we are going to opt out because we were just under the 150k threshold in 2020. I sold a stock earlier this year that will push us over 150K for sure. Also, I believe I will need to pay capital gain on the sale. I am worried that if we take the credit monthly, and then file for 2021 and are over the limit we will end up owning both capital gains, more taxes on a higher income, and owe back some of the credit. Can anyone confirm if I am understanding this right?
I can't answer all of this, but the credit phases out in two stages and for MFJ, partial eligibility goes up to $400,000 -- in other words, $150,000 isn't the cap, that's only the cap for the first phase out. So over $150k you get less than the full amount, but it's not $0 until you're over $400k.
thank for sharing the link! Can I ask a general question about this? I think we are going to opt out because we were just under the 150k threshold in 2020. I sold a stock earlier this year that will push us over 150K for sure. Also, I believe I will need to pay capital gain on the sale. I am worried that if we take the credit monthly, and then file for 2021 and are over the limit we will end up owning both capital gains, more taxes on a higher income, and owe back some of the credit. Can anyone confirm if I am understanding this right?
I heard a bit on the news. Hopefully someone else can chime in too.
It's more of an advance and will be set up against 2021 taxes, but based on 2020 filing. So like you said, you qualify now, but won't next year. You might owe. At least that's what I got from the news segment. We are in a similar boat as far as qualify this year, but most likely not next. So I want to Opt out. If I'm wrong, we will get a nice surprise next year.
We’re wavering now. Or DH is. I have no idea our AGI for next year, so it’s a gamble if it will be low enough to offset what we get from July-Dec and not owe.
DH’s overtime fluctuates so much, it’s a huge guessing game.
thank for sharing the link! Can I ask a general question about this? I think we are going to opt out because we were just under the 150k threshold in 2020. I sold a stock earlier this year that will push us over 150K for sure. Also, I believe I will need to pay capital gain on the sale. I am worried that if we take the credit monthly, and then file for 2021 and are over the limit we will end up owning both capital gains, more taxes on a higher income, and owe back some of the credit. Can anyone confirm if I am understanding this right?
I can't answer all of this, but the credit phases out in two stages and for MFJ, partial eligibility goes up to $400,000 -- in other words, $150,000 isn't the cap, that's only the cap for the first phase out. So over $150k you get less than the full amount, but it's not $0 until you're over $400k.
we won't owe it all back, but will owe some once we pass the $150K threshold right? Do you know if there anywhere that shows the phase out increments?
I can't answer all of this, but the credit phases out in two stages and for MFJ, partial eligibility goes up to $400,000 -- in other words, $150,000 isn't the cap, that's only the cap for the first phase out. So over $150k you get less than the full amount, but it's not $0 until you're over $400k.
we won't owe it all back, but will owe some once we pass the $150K threshold right? Do you know if there anywhere that shows the phase out increments?
You’re not getting the whole amount. You’re only getting partial from July - Dec. The rest will be when you file your taxes.
At least that’s what the letter from the IRS said.
we won't owe it all back, but will owe some once we pass the $150K threshold right? Do you know if there anywhere that shows the phase out increments?
You’re not getting the whole amount. You’re only getting partial from July - Dec. The rest will be when you file your taxes.
At least that’s what the letter from the IRS said.
ahhh, thank you!! I thought the entire credit was divided by the 6 months. So hopefully, if we were to take the advance credit the "extra" would hopefully be offset by the reminder of the credit.
thank for sharing the link! Can I ask a general question about this? I think we are going to opt out because we were just under the 150k threshold in 2020. I sold a stock earlier this year that will push us over 150K for sure. Also, I believe I will need to pay capital gain on the sale. I am worried that if we take the credit monthly, and then file for 2021 and are over the limit we will end up owning both capital gains, more taxes on a higher income, and owe back some of the credit. Can anyone confirm if I am understanding this right?
I heard a bit on the news. Hopefully someone else can chime in too.
It's more of an advance and will be set up against 2021 taxes, but based on 2020 filing. So like you said, you qualify now, but won't next year. You might owe. At least that's what I got from the news segment. We are in a similar boat as far as qualify this year, but most likely not next. So I want to Opt out. If I'm wrong, we will get a nice surprise next year.
This is where I am. H’s bonuses vary so I’m on the fence.
We're way under, and income won't change. Is there any reason to opt out? I'm lazy lol but I keep seeing everyone talk about opting out so idk if I'm missing something.
We're way under, and income won't change. Is there any reason to opt out? I'm lazy lol but I keep seeing everyone talk about opting out so idk if I'm missing something.
I am opting out because I just like getting the money in a refund all at once (We put it towards camp). So I am just doing it for budget planning reasons.
ilikedonuts, we're thinking the same as you. It's $250 for 6 months, so depending our AGI, we would just lose the other 1/2 basically off our refund. I don't think we'll be so far over to affect what we're getting the 2nd half of the year.
Personally, I'm like karinothing and don't want the hassle of trying to now put this money somewhere else because we don't need it personally. I would rather it come in the chunk of the refund.
ilikedonuts, we're thinking the same as you. It's $250 for 6 months, so depending our AGI, we would just lose the other 1/2 basically off our refund. I don't think we'll be so far over to affect what we're getting the 2nd half of the year.
Personally, I'm like karinothing and don't want the hassle of trying to now put this money somewhere else because we don't need it personally. I would rather it come in the chunk of the refund.
I like the idea of it coming all at once too plus then we can see where our variable income is at the end of the year. If it’s monthly, it’ll just sit in our checking account and I’ll forget about it and not transfer it where I should be transferring it 😂
I tried opting out yesterday and ended up having to try again later as I was having phone issues trying to upload my Drivers License. I'm an accountant and was frustrated so I can imagine others will too. For me I use the child tax credit as a buffer for variable income (stocks/dividends/business income). Reasons to opt out: income phaseout, adding/subtracting kids due to custody, budget planning
I understand that they want the people with kids to have the advance on the additional credit to make month to month expenses easier but the thought of clients having to pay back or those who expect that big refund being cut down makes the tax pros the bad guys. Just like when a client gets too much advance premium for the health insurance and have to pay it back we are the bad guys.
I gave up. I did get my Id.me account set up but the thought of also getting DH's set up is just beyond my threshold. DH's income varies somewhat but I don't think we are going to have any dividend payments that put us over where we ended up last year so we will still be within my comfort zone for our taxes. I'm just going to leave it alone and transfer the money each month to DD's savings account.