Need a current 2021 tax planning checklist to ensure you’re prepared for the next tax year? We have you covered! All too often, taxpayers wait until after the close of the tax year to starting thinking about their taxes. Thus miss opportunities that could significantly reduce their tax liability or (better!) financially benefit them. Mid-year is the perfect time for tax planning.
2021 Tax Planning Checklist: Be aware of these common events that can trigger unpleasant tax consequences
The following are some events that can affect your tax return; you may need to take steps to mitigate their impact and avoid unpleasant surprises.
Did you (or are you going to):
- Get married, divorced, or become widowed?
- Change jobs or has your spouse started working?
- Add a solar electric system to your home or purchase an electric vehicle?
- Receive advance child tax credit payments?
- Buy or sell a rental?
- Incur expenses adopting a child?
- Start receiving Social Security benefits?
- Refinance your home or take out a second home mortgage this year?
- Buy or sell a home?
- Retire this year?
- Reach age 72 this year?
- Trade in cryptocurrency?
Additional Financial Events
- Make gifts of over $15,000 to anyone individual this year?
- Receive a substantial inheritance this year?
- Take advantage of tax-beneficial retirement savings?
- Adequately document your cash and non-cash charitable contributions?
- Keep up with your self-employed estimated tax payments?
- Make any unplanned withdrawals from an IRA or pension plan?
- Have a substantial increase or decrease in income?
- Have a substantial gain from the sale of stocks or bonds?
Possible Business Events
- Start, acquire, or sell a business?
- Make any significant equipment purchases for your business?
- Purchase a new business vehicle and dispose of the old one? Defer employer payroll taxes in 2020?
- Start using a part of your home for business this year?
- Exchange real properties used in your trade or business or held for investment?
- Start a retirement plan in your self-employment business?
- Hire veterans’ or other individuals in your business that may qualify for the work opportunity tax credit?
- Exercise an employee stock option?
Of course, these are not the only issues that have tax consequences.
If you anticipate or have already encountered any events/conditions above, consider scheduling a consultation. Give us a call —preferably before tax season —and definitely before the end of the year.
Video: Tax Advantages of Home Ownership in 2021
