2107 Elliott Avenue
by Karalyn Carlton
It’s a good idea to file your 2021 tax return as early as you can. This will allow you to receive refunds earlier and avoid processing delays due to the pandemic.
For the first time in nearly 20 years, the IRS has released updated actuarial or life expectancy tables. For those who take required minimum withdrawals (RMD) from retirement accounts, updated tables will need to be utilized to calculate your annual RMD.
If you work full-time for someone else, you won’t be able to take the home office deduction on your federal income taxes. (Source: USNEWS.com, March 9, 2021)
The Child Tax Credit was increased in 2021 to $3600 for children ages five and under and to $3000 for children ages six through seventeen. (Source: IRS.gov. 2021)
For workplace retirement accounts (i.e. 401(k), 403(b), etc.), the contribution limit rises $1,000 to $20,500. Catch-up contributions for those over age 50 remain at $6,500.Eligibility for Roth IRA contributions has increased up to $129,000 to $144,000 for single filers and heads of households, and $204,000 to $214,000 for those filing jointly as married couples.Those with a SIMPLE IRA Plan (SIMPLE is an acronym for Savings Incentive Match Plan for Employees), can increase their contribution from $13,500 to $14,000.The limit for traditional Individual Retirement Accounts (IRAs) remains at $6,000. The catch-up contribution for traditional IRAs remains $1,000 as well.If these increases apply to your retirement strategy, you may want to make some adjustments to your contributions. Where I can provide clarity or be of any help, I welcome the opportunity.