This year, 2021, may again prove to be challenging relative to your taxes. Preparing for taxes early can not only save you time, but it may also save you money.
FEMA dollars provided to you due to Hurricane Ida damages, other government benefits, unemployment benefits, or working multiple jobs (several examples) may complicate your taxes. There are formerly temporary deductions that have been made permanent, as in medical deductions. According to the New York Times, there is now “a lower threshold for deducting medical expenses. You can continue to deduct unreimbursed medical expenses that exceed 7.5 percent of their income, instead of 10 percent. To take the deduction, filers must itemize.”
If you have had anything unusual occur that you believe may impact your taxes, preparing your taxes in advance is vitally important. Along with your tax advisor at Robert J. Kratz, you can get things rolling and ensure your taxes are filed on time, without the concern of late filing penalties.
You may find the following checklist helpful.
Let’s start with your basic information:
- Name and full address
- The names and relationships of all family members
- Social Security numbers for all family members
- Your filing status, i.e. Married, Single, Head of Household, and so on.
Next, you need your income documentation:
- Unemployment benefit statements
- Social Security benefit statements
- Rental property income
- Documentation of any other income you received
- Other business-related income
Now that you have established your income, you can take a look at your possible deductions:
- IRA contributions
- IRA withdrawals
- Mortgage Interest
- Real estate taxes
- Any other taxes, i.e. city, township, earned income tax
- Charitable contributions (cash, miles driven, other donations, etc. – political contributions are not tax-deductible
- Medical expenses (including insurance premiums if substantial after-tax premiums paid)
- Unreimbursed employee expenses (personal expenses paid for business, job search costs, uniforms, etc.)
- Child and/or dependent care expenses
- Business use of home expenses (square footage of office, not square footage of house)
Finally, make a list of any questions you have about possible deductions.
This blog provides summary information regarding the subject matter at the time of publishing. Please call our office at 610-296-2500 with any questions on how this information may impact your situation. This material may not be published, rewritten, or redistributed without permission, except as noted here. This blog includes or may include links to third-party Internet websites controlled and maintained by others. When accessing these links the user leaves this blog. These links are included solely for the convenience of users and their presence does not constitute any endorsement of the Websites linked or referred to nor does ROBERT J KRATZ & CO have any control over, or responsibility for, the content of any such Websites. All rights reserved.