Last Minute Tax Savings Opportunities for 2021March 22, 2021
Looking for tax saving strategies this filing season? Here are four tips.
Have you filed your taxes yet? If you’re looking to cut last year’s taxes, there are still opportunities for you to do so. Read on.
4 ways you can save on 2020 taxes
- Contribute to a traditional IRA- If you contributed up to $6,000 to a traditional individual retirement account (IRA), you are eligible for a tax deduction. If you’re 50 or older you are able to put in an extra $1,000. Keep in mind that limits may apply based on type or amount of income. You must contribute by April 15, 2021, unless the IRS delays the tax deadline. Residents of Texas and Oklahoma have until June 15, 2021.
- Contribute to an HSA- Are you covered by approved high-deductible healthcare plans for 2020? You have until April 15, 2021 to make contributions to health savings accounts (HSAs) for 2020 (June 15th for Texas and Oklahoma), provided the IRS doesn’t delay the tax deadline. For single taxpayers, the coverage is up to $3,550 (plus $1,000 for those age 55 or older). Family coverage is up to $7,100 (plus $1,000 for HSA owners age 55 or older).
- Contribute to a SEP IRA- If you have self-employment income, you can make a tax-deductible contribution to a Simplified Employee Pension (SEP) of up to $57,000. Taxpayers who have a six-month extension to file have until October 15, 2021 to set up these plans and contribute to them for 2020.
- Save on penalties- If you did not pay enough tax in 2020 and are unable to file now, you can make a payment of a portion or all of the overdue tax to stop or lessen the penalty.
Need help assessing your tax filing situation this year? We can help. Reach out to us today.