Now is the time to review your tax situation for this year. Will you be able to take advantage of the updated laws to date and/or get more money for tax credits in 2021?
UNDER NEW AND UPDATED TAX LAWS FOR 2021:
A charitable contribution is available for those using the standard deduction up to $300. for a single taxpayers and up to $600. for those filing jointly. For 2021 the limit for CASH charitable contributions is 100% of your income and 50% of your income for non-cash contributions. Now is the time to review your giving objectives. Make sure you have receipts for all contributions with values and the date of contribution.
The tuition and fees deduction has been replaced with the Lifetime Learning Credit. This credit is worth up to $2,000. per tax return. Again, gather all your receipts and/or ask for a receipt when signing up for classes.
Unemployment benefits are fully taxable in 2021 as of this writing.
Updated Tax Credits for 2021:
Child Tax Credit: Up tp $3,600. – for children 0 to 5
Up to $3,000. – for children 6 to 17
To receive this full credit your Adjusted Gross Income (AGI)
MUST be below $75,000.(single) and $150,000. (joint)
You can still get $2,000. credit if your income is less than
$200,000. (single) and $400,000.(joint)
MAKE SURE YOU KEEP TRACK OF THE ADVANCE PAYMENTS you received from July thru December 2021. These payments will need to be reported accurately on you
2021 tax return.
Child & Dependent Care Credit for 2021 (DCC): Up to $4,000.(1 child); $8,000.(2+) This credit is ONLY available if both spouses are employed earning AGI of less than $125,000.
Earned Income Tax Credit: Up to $1,502. for households with NO children and you are at least age 19. You will be able to use you 2019 or 2021 income to obtain this credit. The maximum credit for 2021 is $6,728.
Congress is still negotiating other tax changes for 2021. The above are just a few highlights.