Tax Law Change on the Horizon: Here is How You Should Adjust Your Year-End Tax Planning
Dec 9, 2021
Credello: The holidays are upon us, and that means another year is winding down. Along with festive celebrations, this time of year is also critical for tax planning. With tax law changes on the horizon for 2021, here's what you need to know to get ahead of potential changes and adjust your year-end tax planning.
How to Prepare for Year-End Tax Planning
The most critical element of year-end tax planning is that you do it. Having a plan in place can help you get ahead of potential changes so you'll be set whether or not certain laws go into effect. There are a few critical things everyone can do to prepare for tax planning, including:
1. Pay off any existing tax debt.
It's critical to wipe the slate clean and pay off tax debt before attempting to manage the new tax law changes. If you haven't already done so, work with the IRS on a payment plan or submit an offer in compromise if your financial situation allows it. Unfortunately, tax debt isn't going away any time soon. So it's best to get a payment plan in place today so you can look ahead to future taxes.
2. Decrease taxable income by maximizing deductions.
There are things you can do each year to decrease taxable income. For example, be sure to make maximum contributions toward tax-advantaged retirement vehicles like an employer-sponsored 401(k) or individual IRA. You'll also want to look at health savings accounts (HSAs) as another way to reduce what you owe now and receive tax-advantaged growth on that money in the future.
It's also wise to think about managing deductions from two perspectives: the tax law as it stands and with potential changes. For example, suppose you've had a high tax year. In that case, you may look at additional ways to decrease taxable income, like making hefty charitable contributions. But if you believe you'll be in a higher tax bracket next year due to changes in the tax law or new job circumstances, you may defer that sizeable charitable contribution to reap the most benefit from it next tax year instead.
3. Think about gifting more.
High net-worth individuals tend to rely on gifts as a form of wealth transfer. However, since current legislation is targeting the federal gift and estate tax exemption, it may benefit wealthy individuals to think about giving more now. The current exemption in 2021 is $11.7 million per person. But the amount you can give during your lifetime free of gift tax could be dramatically reduced as early as Jan. 1, 2022.
4. Work with a tax professional.
While some tax changes are set in stone, others are still up in the air. If you're uncertain about if and how your taxes may be impacted, it's smart to link up with a tax professional. They can guide you through scenarios that could occur with tax planning and make sure you're making the most of any changes.
Press Release Service by Newswire.com
Original Source: Tax Law Change on the Horizon: Here is How You Should Adjust Your Year-End Tax Planning
More News
F1 Champion Lewis Hamilton Talks Spending Time with Girlfriend Kim Kardashian’s Kids, Reveals Special Gift He Got Them
Lewis Hamilton has opened up about his relationship with Kim Kardashian. The 41-year-old seven-time championship-winning Formula 1 driver and the […] The post F1 Champion Lewis Hamilton Talks Spending Time with Girlfriend Kim Kardashian’s Kids, Reveals Special Gift He Got Them appeared first on Just Jared - Celebrity News, Entertainment News & Photos.
‘SNL UK’ & Cynthia Erivo Give Elphaba-Glinda Shippers A ‘Nigerian Wicked’ Sapphic Parody
Although the Wicked movies may not have given LGBTQ fans the sapphic moment they wanted for Elphaba and Glinda, Saturday Night Live UK heard their demands. On this weekend’s episode of the sketch comedy show, host Cynthia Erivo returned to the magical franchise for the parody Nigerian Wicked, in which she mixed it up by […]
Prince William makes cheeky admission about 2024 selfie with Travis Kelce
Prince William makes cheeky admission about 2024 selfie with Travis KelcePrince William tried to nudge Travis Kelce out of the famous group photo they shared with Taylor Swift in 2024.The Prince of Wales, 44, shared the story on The Graham Norton Show on Friday, talking about a backstage selfie he...
James McAvoy Says He Quit Drinking After His Habits Changed During the COVID-19 Lockdown
James McAvoy is opening up about his sobriety journey. The 47-year-old Split star sat down with Chelsea Handler on her […] The post James McAvoy Says He Quit Drinking After His Habits Changed During the COVID-19 Lockdown appeared first on Just Jared - Celebrity News, Entertainment News & Photos.
Nathan Fielder Negotiated a ‘Kill Switch’ on ‘You Can See Everything,’ Says Lance Oppenheim: ‘If We Didn’t Find Something, We Could Just Throw It All Away’
“You Can See Everything” might be the buzziest film of the moment, but before the Elizabeth Holmes-focused documentary made it to theaters, co-director Lance Oppenheim has admitted that fellow director Nathan Fielder was so skeptical about being able to weave a unique enough narrative that he negotiated a “kill switch” with A24 before they began […]
Which show or movie should *only* be watched in the fall?
Time for my annual rewatch of Over the Garden Wall View Entire Post ›
‘SNL UK’ Pokes Fun At PM Andy Burnham’s Gogglebox Special In Cold Open With ‘Celebrity Traitors’, ‘Graham Norton Show’ & ‘Great British Bake Off’ Parodies
Saturday Night Live UK‘s cold open took aim at Prime Minister Andy Burnham’s bean stockpile with some help from a few familiar British TV personalities. On this weekend’s episode of the sketch comedy show, George Fouracres played Prime Minister Andy Burnham with Emma Sidi as Liverpool’s Mayor Steve Rotheram, poking fun at the pair’s Stand […]
Is Daniel Lissing Single or Married? Learn About the Hallmark Actor’s Wife!
Daniel Lissing has a new movie out tonight (October 24) on Hallmark Channel! The 45-year-old actor is starring in the […] The post Is Daniel Lissing Single or Married? Learn About the Hallmark Actor’s Wife! appeared first on Just Jared - Celebrity News, Entertainment News & Photos.
Is Janel Parrish Single or Married? All About the Hallmark Actress’ Relationship Status
Janel Parrish is returning to Hallmark Channel tonight with a new Countdown to Christmas movie! The 37-year-old actress is starring […] The post Is Janel Parrish Single or Married? All About the Hallmark Actress’ Relationship Status appeared first on Just Jared - Celebrity News, Entertainment News & Photos.
Spend A "Charmed" October In San Francisco And We'll Reveal Which Of Phoebe Halliwell's Lovers Would Fall For You
You're going to meet suspiciously charming strangers, stumble into situations that definitely weren't in your plans, and perhaps fall for someone who comes with a few more secrets than you'd usually tolerate... View Entire Post ›
Christy Carlson Romano Says Shia LaBeouf ‘Trash-Talked’ Hilary Duff’s ‘Lizzie McGuire’ & Hilary ‘Had No Clue’
Christy Carlson Romano is sharing new insight into what it was like working on Disney Channel in the early 2000s […] The post Christy Carlson Romano Says Shia LaBeouf ‘Trash-Talked’ Hilary Duff’s ‘Lizzie McGuire’ & Hilary ‘Had No Clue’ appeared first on Just Jared - Celebrity News, Entertainment News & Photos.
Chris Harrison Says Warner Bros’ Legal Action Against ‘The Vow’ Feels “Personal”: “You Be The Judge”
After Warner Bros. hit The Vow with a cease-and-desist earlier this month, Chris Harrison has addressed the legal drama. The former Bachelor Nation host, whose new dating show premieres Nov. 11 on Fox Nation, said it felt “personal” after Warner Bros’ recent letter accusing the reality show of copyright and trademark infringement in a teaser […]
Recommended
Which "Abbott Elementary" Character Are You?
YOUR NEWS, OUR NETWORK.
Do you have Great News you want to tell the world?
Be it updates about your business or your community, you can make sure that it’s heard by submitting your story to our network reaching hundreds of news sites across 6 verticals.