Tax Planning for 2021: It’s Time.

September 2nd, 2021

Now is the time to schedule a tax planning appointment, especially since there’s still time to correct miscalculations or surprises that may have occurred this year.

Tax planning can make a huge difference.

Even in uneventful years, external forces like new tax laws can be managed if dealt with in advance.

  • Selling a house?You can avoid taxes if primary residence requirements are met.
  • Starting a business?Choosing the correct entity can lower your taxes every year!
  • Getting ready to retire?Properly balancing the different revenue streams (part-time wages, Social Security benefits, IRA distributions and more) has a huge impact on your tax liability.

Put yourself in control of your finances.

Timing is important when it comes to minimizing taxes, and it’s often in your control. For instance, did you know you can bundle multiple years of charitable contributions into one year in order to itemize deductions? Or that holding investments for longer than one year can potentially get you a lower tax rate? Or adjusting your retirement withdrawals can make you more efficient? Remember you hold the keys. Adopting prudent tax strategies can make all the difference.

Tax planning can benefit every level of income.

Don’t think you’re exempt. There are tax strategies to be implemented at all income levels, not just those at the upper levels of the tax bracket. Tax deductions are available for student loan interest, IRA contributions and others even if you claim the standard deduction. Certain tax credits (called refundable credits) will increase your refund even if you don’t owe taxes. Missing any of these tax breaks can unnecessarily increase your taxes.

COVID tax breaks are still available in 2021.

While it’s true that many one-time tax breaks were offered for only the 2020 tax year, there are still plenty of COVID tax breaks available in 2021. Some of these tax breaks include an expanded child tax credit, an increased child and dependent care credit, the ability to roll forward unused funds in your Flexible Spending Account and charitable deductions that are available to all taxpayers, even if you don’t itemize your deductions.

You don’t have to manage your taxes alone.

Tax planning is often as simple as looking for ways to reduce taxable income, delay a tax bill, increase tax deductions, and/or take advantage of all available tax credits. The best place to start is by assessing your current situation, which just happens to be our specialty.

Thankfully, it’s not too late to get on track for 2021. If you haven’t scheduled a tax planning session, now is a great time to do so.