B&J Bookkeeping is anticipating another busy tax year in 2022. But before all things are finalized, there are things you can do to minimize your tax burden for your personal or business income taxes. Below, we will show you the must do items for your 2021 income tax return.
1. Push it to the Max
One of the best ways to keep the IRS from taxing your hard earned income is to invest it in your future. Your employer may offer a 401(k) or similar plan for your retirement. Use it as much as you can. You may also take out your own account through your bank, investment firm, or other. You may even contribute up to $19,500 this year under certain conditions. Other useful figures for your 401(k):
- The annual defined contribution limit is $58,000.
- The annual compensation limit is $290,000.
- Catch up contribution limit is $6,500.
- Highly compensated employees is $130,000.
There are also many other figures to read over if your retirement is more complex. You may click here to get more on 403b/457, SIMPLE, SEP, and other numbers.
2. Use Medical Savings Account Benefits
You may also have a medical savings account for your healthcare needs. For 2021, those with self-only coverage in this account must have an annual deductible that is between $2,400 and $3,600. Maximum out-of-pocket expense is $4,800. Basically, if there is a procedure you need done and this criteria has been met, do it before next year.
3. Get Ready to File Early
Tons of reasons exist for filing your income tax return early from getting your refund sooner to preventing fraud and just plain having it out of the way sooner than later. Have all your income, expenses, deductions, credits, and any other pertinent information ready to go. Remember you may also need to have extra information if you did something like move, get married, have a child, etc.
4. Go Ahead and Estimate
You don’t have wait until you file to find out how much you will be refunded or how much you owe. Many tax calculators exist that allow you to estimate your final number whether you tend to file the short form or itemize. Even your business can use them to get a jump on the important tax information you will need for 2022.
Prepare and File Your 2021 Income Tax Return in Houston
Finally, those who live in Texas should feel free to contact B&J Bookkeeping and Taxes to learn more on how we can help you prepare and file your 2021 income tax return. We proudly serve individuals, professionals, and businesses of all types minimize their tax burden.