Tax News Tips 2021

Man crunching numbers with caculator


January’s “Important Tax Information Enclosed”

What documents to look for in January…W-2, 1099s and 1098s. New 1099NEC for self-employed and 1099K for Cryptocurrency.

Frequently Missed Info!

Child Care expenses, Federal & State estimated tax payments, sales of property, college tuition, stock sales, K-1s, Social Security benefits, last pay stub and other miscellaneous items.

Tax Tips For You… Now!

Required Minimum Distributions (RMDs)

·     Begin at age 72

·     1st RMD may be delayed to April 1, 2022

Charitable Contribution Deduction Expanded

Up to $300 deduction for Single taxpayers that do not itemize. Married couples filing a joint return are eligible for up to $600 deduction if they do not itemize.

Interest on Series EE or I Savings Bonds can Become Tax-Free

·     Bonds purchased after 1989

·     Owner at least 24 years old and the taxpayer. Not the student.

·     Redeemed to pay college, graduate school or vocational school tuition and fees.

·     Subject to income requirements

Advance Child Tax Credit

·     Increased from $2,000 to $3,000

·     Child age expanded to under 18 years old from under 17 years old

·     Children under age 6 eligible for up to $3,600

·     Up to ½ of credit sent in advance monthly beginning July 2021 and continuing through 2021

·     Adjusted Gross Income limitations

·     IRS Letter 6419 will report advance payments to taxpayer

Myth vs. Truth 

·     All taxpayers with timely filed 2020 tax returns have received their refunds. False!

·     Social Security benefits are not taxable. False, sometime taxable based upon other income.

·     Easy to write-off gambling losses. False. Only deduct up to amount of winnings and then is an itemized expense on Schedule A.

Social Security Review 

COLA of 5.9% expected beginning January 2022. Medicare premiums expected to increase less than $10 per month. Wage base increases to $147,000.

Third Stimulus Payment 

Will be reconciled on 2021 Tax Return like 2020 Tax Return reconciliation of first 2 stimulus payments.

Qualified Charitable Distribution (QCD) 

·     For IRA distributions

·     Account holder must be at least 70 ½

·     $100,000 limitation

·     Counts toward Required Minimum Distribution

Only distributions to IRS recognized charities

Accurate Business Solutions Inc.

89-13 Jamaica Avenue,
Woodhaven, NY 11421
(332) 345-4881

Contact Us