Now is the time to begin tax planning for your 2021 return.

Here are some ideas:

  • Contribute to retirement accounts. Tally up all your 2021 contributions to retirement accounts so far, and estimate how much more you can stash away between now and December 31. So consider investing in an IRA or increase your contributions to your employer-provided retirement plans. Remember, you can reduce your 2021 taxable income by as much as $19,500 by contributing to a retirement account such as a 401(k). If you’re age 50 or older, you can reduce your taxable income by up to $26,000!
  • Contribute directly to a charity. If you don't have enough qualified expenses in order to itemize your deductions, you can still donate to your favorite charity and cut your tax bill. For 2021, you can reduce your taxable income by up to $300 if you're single and $600 if you're married by donating to your favorite charity.
  • Consider a donor-advised fund. With a 2021 standard deduction of $12,550 if you’re single and $25,100 if you’re married, you may not be able to claim your charitable donations as a tax deduction if the total of your annual donations is below these dollar amounts. As an alternative, consider donating multiple years-worth of contributions to a donor-advised fund if you have the available cash so you can exceed the standard deduction this year. Then make your cash contributions from the donor-advised fund to your favorite charities over the next three years.
  • Increase daycare expenses. If you and/or your spouse work and have children in daycare, or have an adult that you care for, consider using a daycare so you and a spouse can both work. This is because there is a larger tax break in 2021. If you have one qualifying dependent, you can spend up to $8,000 in daycare expenses while cutting your tax bill by $4,000. If you have more than one qualifying dependent, you can spend up to $16,000 in daycare expenses while cutting your tax bill by $8,000. To receive the full tax credit, your adjusted gross income must not exceed $125,000.
  • Contribute to an FSA or an HSA. Interested in paying medical and dental expenses with pre-tax dollars? Then read on...If you have a flexible spending account (FSA), you can contribute up to $2,750 in 2021. This allows you to pay for medical expenses in pre-tax dollars! Even better, unspent funds in an FSA can now be rolled from 2021 to 2022. And if you have a health savings account (HSA), you can contribute up to $3,600 if you’re single and $7,200 if you’re married. So add up all your contributions to your FSA or HSA so far in 2021 and see how much more you can contribute between now and December 31.

Please call to discuss these and other tax planning opportunities.

It’s an audiobook! It’s a radio show! No, it’s a podcast!

Podcasts have taken the world by storm over the past decade. Whether you’re a seasoned podcast consumer or first-time listener, navigating the podcasting landscape can be overwhelming. Here is what you need to know.

Podcast basics

Its beauty comes from its simplicity – the spoken word recorded and uploaded to the internet. It can be as basic as one person reading the top news stories of the day or as sophisticated as a highly-produced, multi-layered story that takes a full-time crew and multiple episodes to narrate. Its low cost to entry and wide reach attracts podcasters small and large to create a vast library of content available in every genre you can imagine.

Unlike over-the-air radio, podcasts are not regulated by the FCC, so anything goes. If foul language and mature subjects are not your thing, carefully read descriptions and reviews so you understand the nature of the content. Many podcasts will also put a disclaimer at the beginning of the episode if it contains mature themes.

Podcasts are also easy to find and use. Simply search podcasts and follow the instructions to use them. The more popular apps for listening to podcasts include Apple, Spotify, Stitcher, SoundCloud and Google.

Popular podcasts

  • For the family. There are thousands to choose from. The podcasts in this group are a great way to keep kids engaged while on a road trip or as an outlet that is not the TV. Several of the most popular, per Common Sense Media, are: But Why: A podcast for curious kids. Ear Snacks: A funny podcast for preschoolers and little kids. This American Life: The most downloaded podcast in America by NPR that tends to be popular with all ages, but especially teens.
  • News. This category is the most listened to podcast category per Apple. According to Feedspot.com, here are some of this category's most popular podcasts: The Daily: Top news from New York Times' journalists, 20 minutes a day. WSJ What's News: Wall Street Journal reporters cover top stories on business, the economy, markets, and politics. BBC Global News Podcast: Top news from across the world from the BBC World Service.
  • True Crime. According to vulture.com, true crime is the genre that elevated podcasts into the stratosphere. Here are some of the popular choices according to the website: Serial: A spinoff from This American Life, the Serial podcast pioneered investigative storytelling by going deeper into true crime narratives. Bear Brook: Details a decades-long investigation about four unidentified bodies discovered in New Hampshire and an unknown serial killer. Undisclosed: Tells stories about innocent people caught up in a corrupt judicial system.
  • Information. Some of the best podcasts are those that don't fit into a specific category. According to Feedspot.com, the following podcasts do a great job of storytelling across a wide array of subjects: Stuff You Should Know: Tackles one topic per podcast. Subjects can vary from war history to Tupperware to how the Electoral College system works. Freakonomics: Explores the hidden side of everything, usually from a monetary perspective. TED Talks Daily: Brings you the latest TED talks in audio format.

 

IRS Announces Common Tax Scams

The IRS recently announced its 2020 edition of its annual Dirty Dozen list of tax scams with a special emphasis on aggressive and evolving schemes related to COVID-19 tax relief, including Economic Impact Payments. Here are six of the more common scams.

Phishing. Phishing refers to potential fake emails or websites looking to steal your personal information. Remember the IRS will never initiate contact with you via email about an outstanding tax bill, refund or Economic Impact Payment.

What you can do. If you receive any suspicious phishing emails, forward them to This email address is being protected from spambots. You need JavaScript enabled to view it..

Fake charities. Criminals frequently exploit natural disasters and other crisis situations such as this year’s pandemic by setting up fake charities to steal donations. Fraudulent schemes normally start with unsolicited contact by telephone, text, social media, e-mail or even in person.

What you can do. Verify the charity’s existence by searching for it using the IRS’s search tool.

Threatening phone calls from IRS impersonators. IRS impersonation scams include phone calls threatening arrest, deportation or license revocation if you don’t pay a bogus tax bill. The IRS will never demand immediate payment or ask for financial information over the phone.

What you can do. If you received a phone call, contact your local IRS office to verify whether you owe any taxes.

Social media scams. A scammer will use social media platforms such as Facebook and Twitter to obtain personal information from you, then use that information to trick you into providing them with confidential information. For example, the scammer could impersonate a family member, friend or co-worker in an attempt to obtain financial information.

What you can do. Be careful of publishing confidential information on social media. Verify the identity of any person or organization that asks you for confidential information.

Economic impact payment or tax refund theft. Criminals file false tax returns or supply other bogus information to the IRS to divert refunds or Economic Impact Payments to wrong addresses or bank accounts.

What you can do. Contact a qualified professional to help walk you through how to report identity theft to the IRS.

Senior fraud. Senior citizens have become more comfortable with various technologies such as social media. This has opened the door for scammers to take advantage of senior citizens by using fake emails, text messages and fake websites to steal personal information.

What you can do. Be the eyes and ears for the senior citizens you come in contact with. According to the IRS, anecdotal evidence indicates that senior fraud decreases substantially when a trusted friend or family member takes an interest in the senior’s affairs.