You could be required to submit Form 8862, Information to Claim Certain Credits After Disallowance, if you claim the earned income tax credit (EITC) or the extra child tax credit (ACTC) on your tax return. If your EITC or ACTC was denied or decreased for any reason other than a clerical or mathematical error, the IRS requires you to file this form.
You must ascertain the reason for the IRS’s denial of your EITC or ACTC when you get a notice to that effect. You won’t need to submit Form 8862 if it was the result of a clerical or mathematical error. If it was due to something else, like an incorrect social security number or an excessive income, you must fill up and submit Form 8862.
1. Select the “Take me to my return” button after signing into your TurboTax account.
2. Select “Deductions & Credits” under the “Federal Taxes” heading. 3. Click “Show More” under “Other Credits” after scrolling down to that section.
4. Select “Earned Income Tax Credit” and complete Form 8862 by following the on-screen instructions.
A section 444 election is an additional item to think about. This enables a partnership to choose an alternative tax year to the one that is necessary. Prior to making this decision, it’s crucial to speak with a tax expert. Additionally, you still have until March 15 to choose an S-Corp for 2021.
Last but not least, if you file an S-Corp return late, you may be subject to a penalty of up to $195 per shareholder, per month, for each month the return is overdue. By requesting an extension or submitting the return on time, this fine can be avoided.
In conclusion, you must submit Form 8862 in order to claim the EITC or ACTC in a subsequent year if you were refused them for any reason other than a clerical or mathematical error. TurboTax filing is straightforward, but it’s crucial to comprehend additional tax concepts like section 444 elections and S-Corp filing deadlines and penalties. Your tax return can be filed accurately and on time if you consult with a tax expert.
No, Form 8832 does not have to be submitted before Form 2553 for a single-member LLC. While Form 2553 is used to elect S corporation status for tax purposes, Form 8832 is used to amend an LLC’s tax classification. However, before filing Form 2553 to elect S corporation status, the single-member LLC must file Form 8832 to modify its classification from corporation to disregarded entity.