Biden’s Build Back Better bill has passed the house and there’s no way we can predict if and when it will pass the Senate. Just in case, there are some things you can do before December 31, 2021 to save some tax dollars.
- If possible, accelerate any of your 2022 income into 2021 to avoid the increased tax rates for higher-income earner Individuals (over $400,000).
- If you intend on making a charitable contribution, do it now. For 2021 you can receive a $300
($600 joint) charitable contribution credit, even if you don’t itemize. If you do itemize, and you are philanthropic it is feasible to wipe out 100% of your taxable income for 2021.
- If you have or expect medical bills, pay them in 2021 since the 7.5% threshold has been temporarily reinstated from 10%.
- If you are self-employed, you can deduct 100% of meals and entertainment for employees in 2021, up from the prior 50% limit. Pay for that holiday party in the current year!!!
- If you qualify to deduct educational expenses, the lifetime learning credit has been expanded to $2,000 which comes right off the tax owed. Make sure you review the income limits.
As more changes take place we will keep you updated. Contact us today if you have any questions!