Last call: tax breaks before they're gone
The number one tax loophole? Don’t make any money. Oh right, that’s probably not a good idea. Okay, the second best tax break has to be making less money then, right? Close, the key is actually to just look like you did.
As deceptive as that sounds, it’s an entirely legal thing to do, and the IRS is openly inviting us to reduce our taxable income every year. It’s literally written into the tax code on purpose. With this in mind, tax breaks are also transitory sometimes and need to be eaten while hot.
Pandemic-related tax breaks that are expiring:
- Stimulus checks: Payouts from the third stimulus payment were phased out with income brackets, meaning you might not have qualified if you made too much in 2020. However, if your income in 2021 was reduced enough to drop you below the threshold, you could be due more money.
- Child-tax credit: Similar to stimulus checks, child tax credits were amended and adjusted upwardly during the pandemic, with the $1,600 or $1,000 extra per child set to expire in 2021 barring an extension. If you missed out on this due to a higher income that dropped in 2021, you could stand to benefit on your taxes.
- Charitable giving: The charitable giving deduction is up this year, doubling from a $300 limit for those who didn’t itemize their deductions last year to $600 this year. This deduction will be what’s classified as “below the line” and reduce your taxable income, as opposed to your adjusted gross income.
🤔 Want to review what's tax-deductible and what's not? Put your skills to the test: