This week, Craig Siminski, of CMS Retirement Income Planning, shares an article discussing various tax-related financial moves to consider before the end of the calendar year:
Here are some things to consider as you weigh potential tax moves before the end of the year —
Defer Income to Next Year
Consider opportunities to defer income to 2022, particularly if you think you may be in a lower tax bracket then.
For example, you may be able to defer a year-end bonus or delay the collection of business debts, rents, and payments for services in order to postpone payment of tax on the income until next year.
Look for opportunities to accelerate deductions into the current tax year.
If you itemize deductions, making payments for deductible expenses such as medical expenses, qualifying interest, and state taxes before the end of the year (instead of paying them in early 2022) could make a difference on your 2021 return.
Make Deductible Charitable Contributions
If you itemize deductions on your federal income tax return, you can generally deduct charitable contributions, but the deduction is limited to 60%, 30%, or 20% of your adjusted gross income (AGI), depending on the type of property you give and the type of organization to which you contribute (Excess amounts can be carried over for up to five years).
For 2021 charitable gifts, the normal rules have been enhanced: The limit is increased to 100% of AGI for direct cash gifts to public charities. And even if you don’t itemize deductions, you can receive a…
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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 23 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.
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