When you file your tax return, you must check one of the following filing statuses: Single, married filing jointly, married filing separately, head of household or qualifying widow(er). Who qualifies to file as a head of household, which is more favorable than single? To qualify, you must maintain a household, which for more than half […]
Author Archive | James B. Reynolds
How to ensure life insurance isn’t part of your taxable estate
If you have a life insurance policy, you may want to ensure that the benefits your family will receive after your death won’t be included in your estate. That way, the benefits won’t be subject to federal estate tax. For 2021, the federal estate and gift tax exemption is $11.7 million ($23.4 million for married […]
New law tax break may make child care less expensive
The new American Rescue Plan Act provides eligible families with an enhanced child and dependent care credit for 2021. This is the credit for expenses paid for the care of qualifying children under the age 13 so the taxpayer can be gainfully employed. For 2021, the first $8,000 of care expenses generally qualifies for the […]
New law: Parents and other eligible Americans to receive direct payments
President Biden has signed the American Rescue Plan Act into law. Among the many relief provisions are direct payments that will be made to eligible individuals. The full amount for eligible individuals is $1,400 ($2,800 for eligible married couples filing joint tax returns) plus $1,400 for each dependent. Most eligible taxpayers will receive direct bank […]
Estimated tax payments: The deadline for the first 2021 installment is coming up
April 15 is not only the deadline for filing your 2020 tax return, it’s also the deadline for the first estimated tax payment for 2021. You may have to make estimated payments if you receive interest, dividends, self-employment income, capital gains or other income. If you don’t pay enough tax during the year through withholding […]
Retiring soon? Recent law changes may have an impact on your retirement savings
If you’re approaching retirement, you probably want to ensure the money you’ve saved in retirement plans lasts as long as possible. If so, be aware that a law was enacted in late 2019 that made significant changes to retirement accounts. For example, the SECURE Act repealed the maximum age for making traditional IRA contributions. Before […]
Didn’t contribute to an IRA last year? There still may be time
If you’re getting ready to file your 2020 tax return, and your tax bill is higher than you’d like, there might still be an opportunity to lower it. If you qualify, you can make a deductible contribution to a traditional IRA right up until the April 15, 2021 filing date and benefit from the tax […]
Did you make donations in 2020? There’s still time to get substantiation
To claim a deduction for a donation of $250 or more, you generally need a contemporaneous written acknowledgment from the charity. “Contemporaneous” means the earlier of the date you file your income tax return, or the extended due date of your return. If you made a donation in 2020 but don’t have a written acknowledgment, […]
2021 Individual Taxes: Answers to Your Questions About Limits
For 2021, you can contribute up to $19,500 (unchanged from 2020) to a 401(k) or 403(b) plan. You can make an additional $6,500 catch-up contribution if you’re age 50 or older.
The Power of the Tax Credit for Buying an Electric Vehicle
Although electric vehicles are a small percentage of the cars on the road today, they’re increasing in popularity. And if you buy one, you may be eligible for a federal tax break. The tax code provides a credit to purchasers of qualifying plug-in electric drive motor vehicles including passenger cars and light trucks. The credit […]
