22 Nov, 2021
Source: Wall Street Journal | Repost Liston & Tsantilis 11/21/2021 - Plan your 2021 taxes now—or else. Or else what? Or else risk missing out on a large stimulus payment, or face a surprise bill at tax-filing time, or forgo a charitable deduction. Year-end tax planning always matters, but new or temporary tax-code changes make it different this year. “There are so many new variables, and they bring opportunities for saving—if you plan,” says Jeffrey Porter, a CPA who practices in Huntington, W.Va. Here’s a dramatic but not far-fetched example of how strategizing could save a young family at least $7,600 this year. Say that a married couple has a new baby plus two children ages six and eight. They think their 2021 adjusted gross income will be $162,000, which is below their 2020 income because one spouse temporarily left the workforce this year. This couple didn’t qualify for $7,000 in third-round stimulus payments based on their 2020 income. And their 2021 income will be just above the $160,000 limit for payments to married joint filers. But see what happens if this couple rearranges their 2021 income so it’s below $150,000. They become eligible for $7,000 of stimulus payments, and they’ll get $600 in new child tax credits for 2021 that they would have lost due to a separate phaseout. Read the full article...