Tax Season: What to Keep in Mind This Year

Careful planning for tax season can help to make the process as easy and stress-free as possible.

What do you need to know about getting your 2021 taxes in order? Note that there are a few recent updates and changes that may affect you.

Here are a few key details to keep in mind for this year. And, as always, reach out if you would like to check in.

Tax brackets — The tax brackets for 2021 are different from those for 2020. For example, the tax rate is 37% for individuals making more than $523,600 and for married couples filing jointly who make more than $628,300. In 2020, the tax rate was 37% for individuals making over $518,400 and for married couples earning more than $622,050.

Capital gains taxes — Capital gains tax rates change each year based on inflation. For the 2021 tax year, the capital gains tax rate is 20% for individuals making more than $445,850 and for married couples filing jointly who earn more than $501,600.

Deductions — When getting ready for tax season, keep in mind all of your potential deductions. Have you made any charitable contributions? Can you claim the child tax credit?

The necessary documents — Gather all pertinent documents ahead of filing, including expense and deduction documentation and any forms related to other sources of income, such as a trust.

Please reach out if there is anything we can help with.