Financial Advisor LA David Rae appears again on Spectrum News Los Angeles Inside the Issue with host Alex Cohen.  The topic for this segment is the $1.9 Trillion  American Rescue Plan passed by Nancy Pelosi and the house, the Senate, and signed by President Joseph Biden what this means for you and your taxes. American Rescue Plan Taxes 2020 and tackling tax returns 2020 and beyond

By David Rae Certified Financial Planner™, Accredited Investment Fiduciary™

Tax season can be frustrating and tedious, even in the best of times.

This year, you can bet on it being even worse.  New for 2020 and 2021 tax years are Stimulus Payments, Unemployment Benefits, Job Changes  Moving, PPP Loans.  Most taxpayers will find filing their taxes more complicated this year and even next year.

Is There Still Time to Lower Your 2021 Taxes?

Tax planning is always valuable but may provide even more massive value this year. Many of the benefits of the American Rescue plan are income dependent. Lowering your income just a few dollars could be the difference between receiving a stimulus check or not.  It could also determine whether you owe taxes on your unemployment benefits.

Many taxpayers will just take the standard deduction. If you are a Los Angeles Homeowner, you are likely to be itemizing your tax deductions. Take some extra time to make sure you aren’t missing any valuable tax deductions. Did you donate items to charity? Have you volunteered during the pandemic? The list of deductions you might have missed is a mile long.

This is the year to top off your retirement accounts and to benefit from the tax benefits they provide.  You can contribute $6000 to a Traditional IRA (and $6000 for your spouse); the deadline is April 15^th.  For those over age 50, you can also do an additional $1000 catch-up contribution. If you have self-employment income (or own your own business), you can potentially contribute $57,000 to a SEP IRA to reduce your 2021 taxes.   For business owners who have already set up a 401(k) plan or Cash Balance Pension plan, you have until you file your taxes to make the business contributions to these accounts.

Tackling your tax returns 2021 may be complicated, but a little extra tax planning can potentially save you thousands of dollars in taxes.

Other Tackling Tax Returns Topics in this video:

Change you need to know about to efficiently tackle tax returns for the prior year.

-Expansion of the Child Tax Credit- This is huge for parents.

-Changes to the Maximum Premium for Obamacare health insurance

-Changes to the Medical Tax Deduction

–Home Office Deduction– who can benefit and who can’t. The answer may piss you off. (be mad at Trump, he probably costs you quite a bit of money on this one.)

If your adjusted gross income is near $150,000 (probably talking salary in the $175-200k range), this is the year to get the help of an amazing financial planner and tax pro. For business owners, this number jumps to closer to as high as $300,000.  I would argue if you are making more than $300,000, you should already be working with the top LA Financial Advisor and tax pros.   Many of the benefits of the American Rescue plan are eliminated or phased out around the $150,000 (adjusted gross) income range.  That means after your deductions, your income is around this number.

Who is Financial Planner LA?

He is the guy who can help with tackling tax returns in 2020 and into the future. Why pay more taxes than is necessary?

DAVID RAE, CFP®, AIF® is a Los Angele financial planner with DRM Wealth Management, a regular contributor to Advocate Magazine, Huffington Post, Forbes not to mention numerous TV appearances.  He helps smart people across the USA get on track for their financial goals.  For more information visit his website at www.davidraefp.com

Fee-Only Financial Advisor Serving Los Angeles Palm Springs and Beyond.

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