If your 2019 earned income was more than your 2021 earned income, you can use your 2019 earned income to determine the earned income credit (EIC) on your 2021 tax return. You may benefit from this provision if your income went down after 2019 due to the pandemic, or any other reason for that matter,Read more about Earned Income Credit[…]

In general, if you purchase health insurance through the Marketplace, you don’t qualify for any premium assistance when your income is too high. However, for 2021 and 2022, if your household income is more than 400% of the federal poverty line (FPL), you may be eligible to claim the premium tax credit (PTC) and willRead more about Premium Tax Credit[…]

If the home acquisition debt on your principal residence was canceled after 2017, you may exclude up to $2 million ($1 million if MFS) from gross income for tax years 2018 through 2020. This exclusion was set to expire on Dec. 31, 2017, but was retroactively extended through Dec. 31, 2020. Give us a callRead more about Qualified Principal Residence Debt Exclusion[…]

For 2021, the tuition and fees deduction is gone, but you might benefit from the lifetime learning credit if your income is below $90,000 ($180,000 if MFJ), which matches the income limitations for the American opportunity tax credit. Furthermore, COVID-19 emergency financial aid grants under the CARES Act are excluded from gross income, but qualifiedRead more about Education Tax Benefits[…]

For 2021 only, the child tax credit (CTC) increased from $2,000 to $3,000 for each child under age 18, or $3,600 for each child under age 6. Unfortunately, the extra amount ($1,000 or $1,600, respectively) is reduced when income exceeds $150,000 for married taxpayers filing a joint return (MFJ) and qualifying widow(er)s (QW), $112,500 forRead more about Child Tax Credit[…]

For 2021 only, the child and dependent care credit increased significantly and is fully refundable even if you have no tax liability, so don’t forget to keep track of your work-related child care expenses. The dollar limit for eligible expenses is $8,000 for one child and $16,000 for two or more qualifying children. If yourRead more about Child and Dependent Care Credit[…]

Ordinarily, if you choose to claim the standard deduction, you cannot deduct your charitable con­tributions. Good news though, if you don’t itemize deductions for 2021, you may deduct up to $300 ($600 if MFJ) on your 2021 tax return for cash con­tributions made to most charitable organizations. If it’s better for you to itemize deductions,Read more about Charitable Contributions[…]

Required minimum distribution (RMDs) were waived for tax year 2020 only, so don’t forget to take your RMD for 2021 by Dec. 31, 2021. If you turn 70½ after 2019, you must begin taking RMDs from your traditional IRA by April 1 of the year following the year you reach age 72. For example, ifRead more about Required Minimum Distributions[…]