Final shake out of how the latest stimulus bill benefits us in direct payments and tax savings.
Stimulus (x4):
+$5,600
First $10,200 of unemployment will be tax free for 2020:
Tax savings 2020: +$1,700
Child Tax Credit changes:
Tax savings 2021: +$2,000
At the lease, $1,000 tax savings for DL (increased child tax credit)
Probably $1,000 for MM (advanced child tax credit). Best I can determine, they can't clawback $2,000 (of advanced credits) if our AGI is below $60K. It's $1,000 that they can't clawback if our AGI is below $90K. I'd say the biggest unknown (re: our 2021 AGI) is unemployment income, noted below.
MM is not eligible for this tax credit (he turns 18 this year). He will most likely get the advanced tax credit because we have not filed our 2020 tax return yet.
Note: The catch is we can't file our tax return for a long time. Will go on extension and plan to file around the 10/15 due date.
Unemployment extension:
???
MH did receive his last unemployment check and it had a note that said it will automatically renew and nothing he has to do. If that's the case, will just keep taking benefits. (I noted in my last post we were kind of over the red tape and had already replaced two years of his income).
Note: If we do continue to receive unemployment benefits with Fed boost, the less we can keep of advanced child tax credit for MM (who turns 18 this year). Will evaluate as the year progresses.
I can further manipulate AGI by throwing more into my 401K, but I don't foresee doing that this year. I need all the cash I can for college. TBD, I guess. I am still in the "can hope for a free ride" stage (waiting for acceptances).
Total unexpected monies: $9,300
It took a little time for me to find (more detailed) clawback/phaseout rules for the 2021 advanced child tax credit. Just noting a very detailed blog post for future reference (linked below). That's getting complicated enough, I want to at least be able to remember why I made this plan (to file our tax return 10/15). I will get more in the weeds when I take my professional education classes later this year.