The mathematics of filling out Form 1040 could result in some smaller numbers.
Based on your taxable income, you will get a federal tax refund if you have paid or withheld more than the amount of money you owe.
The Internal Revenue Service (IRS) says to be on the lookout for important letters from the agency.
Letter 6419 and Letter 6475 will help guide you through your 2021 tax return.
The IRS says to hold onto the letters because it can help you quickly and accurately file your tax return.
We break down how this information may affect your tax refund.
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Child tax credit payments
In December 2021, the IRS started sending out Letter 6419.
The agency explained the letters will continue to be mailed through January.
The IRS says Letter 6419 will have the total amount of advance CTC payments taxpayers received in 2021 and the number of qualifying children used to calculate the advance payment.
Families who received advance payments will need to file a 2021 tax return.
You will need to compare the advance child tax credit payments you received in 2021 with the amount of CTC you can properly claim on your 2021 tax return.
If you received too much CTC money, you will need to pay back the IRS.
The IRS will begin sending Letter 6475 in late January.
This letter will have information on your third economic impact payment which was issued between March 2021 and December 2021.
The letter will help economic impact payment recipients determine if you are entitled to and should claim the recovery rebate credit on your tax year 2021 tax returns which you will file in 2022.
The IRS says Letter 6475 will contain the total amount of the third economic impact payment and any plus-up payments received.
Individuals who didn’t qualify for the third economic impact payment or did not receive the full amount may be eligible for the recovery rebate credit based on their 2021 tax information.
Student loan payments
The student loan moratorium was set to expire on January 31, 2022.
The Biden administration extended the pause until May 1, 2022.
That means payments will not resume until mid-2022.
Interest rates on the loans will remain at 0%.
The president cited the ongoing challenges student loan borrowers continue to face related to the pandemic.
The downside to the pause in federal student loan payments is that you cannot write-off any student loan interest.
In the past, borrowers may deduct up to $2,500 of interest, depending on how much they paid.
We explain how student loans affect your taxes.
Plus, why some parents were only paid half of their child tax credit payment.