The third stimulus package may affect your tax return this year and future years

A sweeping new COVID-19 economic relief package was signed into law by President Biden on March 11, 2021.

After a difficult year, many taxpayers could fall for common tax myths. Tax rumors, tax misinformation, and various myths are much more common than you may think. These can lead to costly errors for taxpayers who file their taxes incorrectly as a result. Bad advice can lead to big expenses, big tax bills, or even an IRS audit.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was created in response to the COVID-19 pandemic to provide aid, relief, and increased economic security to affected individuals. The Act provided specific aid and tax benefits for taxpayers who needed to withdraw more money than usual from their retirement and 401(k) plans during the pandemic.

Life changes like getting married or divorced, having or adopting children, and buying or selling a house have traditionally had an impact on your federal tax return. However, the 2023 tax season will likely throw surprises at taxpayers who don’t plan ahead. It's important to be prepared so you're not shocked by the result when you file your income taxes. 

The year 2020 was one for the history books in many ways, and it’s not done delivering surprises even as tax season is under way in 2021. One pleasant surprise could be in store for many taxpayers who may qualify for the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) under the tax law that went into effect in December 2020.

Year after year, natural disasters plague our nation and leave behind damaged or lost property. The federal government will designate certain areas affected by tornados, snowstorms, droughts, earthquakes, and hurricanes as federally declared disaster areas. The IRS attempts to ease the financial burden on taxpayers residing in these regions by providing disaster tax relief.