{"id":362285,"date":"2021-11-04T06:07:00","date_gmt":"2021-11-04T03:07:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how\/"},"modified":"2021-11-04T06:07:00","modified_gmt":"2021-11-04T03:07:00","slug":"tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how\/","title":{"rendered":"#Tax Guy: It\u2019s not too late \u2014 you can still trim your 2021 tax bill. Here\u2019s how."},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a23e9b60348b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a23e9b60348b\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how\/#The_tax-smart_ways_to_donate_to_charity_pre-pay_college_bills_and_deal_with_your_Roth_IRA\" >The tax-smart ways to donate to charity, pre-pay college bills and deal with your Roth IRA.<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how\/#If_youre_charitably_inclined_sell_loser_shares_and_give_away_the_resulting_cash_give_away_winner_shares\" >If you\u2019re charitably inclined: sell loser shares and give away the resulting cash; give away winner shares<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how\/#Gifts_to_charities\" >Gifts to charities\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how\/#Make_gifts_to_loved_ones\" >Make gifts to loved ones<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how\/#Make_charitable_donations_from_your_IRA\" >Make charitable donations from your IRA\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how\/#Consider_a_Roth_IRA_conversion\" >Consider a Roth IRA conversion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/buradabiliyorum.com\/en\/tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how\/#Prepay_college_bills\" >Prepay college bills<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/buradabiliyorum.com\/en\/tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how\/#Defer_income_into_next_year_%E2%80%94_if_you_dare\" >Defer income into next year \u2014 if you dare\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/buradabiliyorum.com\/en\/tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how\/#The_last_word\" >The last word<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/buradabiliyorum.com\/en\/tax-guy-its-not-too-late-you-can-still-trim-your-2021-tax-bill-heres-how\/#Bill_Bischoff\" >Bill Bischoff<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#Tax Guy: It\u2019s not too late \u2014 you can still trim your 2021 tax bill. Here\u2019s how.<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"The_tax-smart_ways_to_donate_to_charity_pre-pay_college_bills_and_deal_with_your_Roth_IRA\"><\/span>\n  The tax-smart ways to donate to charity, pre-pay college bills and deal with your Roth IRA.<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\" role=\"region\" aria-label=\"article body\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000473150\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000473150\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       With year-end rapidly <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roaching, it\u2019s time to consider moves that will lower your 2021 tax bill and hopefully position you for tax savings in future years too. This column is Part Two of my list of suggested year-end strategies. In Part One, we addressed a bunch of proposed federal income tax increases that make year-end tax planning highly uncertain this time around.\u00a0<\/p>\n<p> In this column, we nevertheless forge ahead with the rest of the year-end planning story \u2014 understanding full well that things could change. So, stay tuned and stay flexible my friends. Meanwhile, onward!\u00a0\u00a0<\/p>\n<div class=\"paywall\">\n<h4><span class=\"ez-toc-section\" id=\"If_youre_charitably_inclined_sell_loser_shares_and_give_away_the_resulting_cash_give_away_winner_shares\"><\/span><strong>If you\u2019re charitably inclined: sell loser shares and give away the resulting cash; give away winner shares<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p> If you want to make gifts to charities or loved ones, you can make them in conjunction with an overall revamping of your taxable account stock and equity mutual fund portfolios. Make gifts according to the following tax-smart principles.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Gifts_to_charities\"><\/span><strong>Gifts to charitie<\/strong>s\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Don\u2019t give away loser shares (currently worth less than what you paid for them). Instead, sell the shares and book the resulting tax-saving capital loss. Then you can give the cash sales proceeds to charity.<em>\u00a0<\/em><\/p>\n<p>Sell loser shares and collect the resulting tax-saving capital losses. Then give the cash sales proceeds to charity and claim the resulting tax-saving charitable write-offs, assuming you itemize deductions. Following this strategy delivers a double tax benefit: tax-saving capital losses plus tax-saving charitable deductions.\u00a0<\/p>\n<p>On the other hand, donate winner shares instead of giving away cash. Why? Because donations of publicly traded shares that you have owned for over a year result in charitable deductions equal to the full current market value of the shares at the time of the gift, assuming you itemize. Plus, when you donate winner shares, you escape any capital gains taxes on those shares. So, this idea is a double tax-saver: you avoid capital gains taxes, and you get a tax-saving charitable deduction. Meanwhile, the tax-exempt charitable organization can sell the donated shares without owing anything to Uncle Sam.\u00a0<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Make_gifts_to_loved_ones\"><\/span><strong>Make gifts to loved ones<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>The principles for tax-smart gifts to charity also apply to gifts to relatives and other loved ones.\u00a0 Give away winner shares. Most likely, the gift recipient will pay a lower tax rate than you would pay if you sold the shares.\u00a0 Sell loser shares and collect the resulting tax-saving capital losses. Then give the cash sales proceeds to loved ones.\u00a0<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Make_charitable_donations_from_your_IRA\"><\/span><strong>Make charitable donations from your IRA\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>IRA owners and beneficiaries who have reached age 70\u00bd are permitted to make cash donations totaling up to $100,000 to IRS-approved public charities directly out of their IRAs. These so-called qualified charitable distributions, or QCDs, are federal-income-tax-free to you, but you get no itemized charitable write-off on your Form 1040. That\u2019s OK, because the tax-free treatment of QCDs equates to an im<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>te 100% federal income tax deduction without having to worry about restrictions that can delay itemized charitable write-offs. <\/p>\n<p>QCDs have other tax advantages too. Contact your tax adviser if you want to hear about them. If you\u2019re interested in taking advantage of the QCD strategy for 2021, you will need to arrange with your IRA trustee or custodian for money to be paid out to one or more qualifying charities before year-end.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Consider_a_Roth_IRA_conversion\"><\/span><strong>Consider a Roth IRA conversion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>The best scenario for converting a traditional IRA into a Roth account is when you expect to be in the <em>same or higher<\/em> tax bracket during retirement. That\u2019s certainly a reasonable expectation. However, there\u2019s a current tax cost for converting, because a conversion is treated as a taxable liquidation of your traditional IRA followed by a non-deductible contribution to the new Roth account. If you don\u2019t convert until next year or later, the tax cost could be higher, depending on what happens with tax rates.\u00a0\u00a0\u00a0<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>After the conversion, all the income and gains that accumulate in the Roth account, and all withdrawals, will be federal-income-tax-free \u2014 assuming they are qualified withdrawals. In <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>, qualified withdrawals are those taken after: (1) you have had at least one Roth account open for more than five years and (2) you have reached age 59\u00bd, become disabled, or died. With qualified withdrawals, you (or your heirs if you pass on) avoid having to pay higher tax rates that might otherwise apply in future years. While the current tax hit from a Roth conversion is unwelcome, it could be a relatively small price to pay for future tax savings.\u00a0<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Prepay_college_bills\"><\/span><strong>Prepay college bills<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>If your 2021 AGI allows you to qualify for the American Opportunity college credit (maximum of $2,500 per eligible student) or the Lifetime Learning higher education credit (maximum of $2,000 per family), consider prepaying college tuition bills that are not due until early 2022 if that would result in a bigger credit on this year\u2019s Form 1040. You can claim a 2021 credit based on prepaying tuition for academic periods that begin in January through March of next year.\u00a0<\/p>\n<p>For 2021, both credits are phased out (reduced or completely eliminated) if your modified adjusted gross income (MAGI) is too high. The phase-out range for unmarried individuals is between MAGI of $80,000 and $90,000. The range for married joint-filers is between MAGI of $160,000 and $180,000. MAGI means \u201cregular\u201d AGI, from your Form 1040, increased by certain tax-exempt income from outside the U.S. which you probably don\u2019t have.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Defer_income_into_next_year_%E2%80%94_if_you_dare\"><\/span><strong>Defer income into next year \u2014 if you dare\u00a0\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>It may also pay to defer some taxable income from this year into next year if you optimistically believe you\u2019ll be in the <em>same or lower<\/em> tax bracket in 2022. For example, if you\u2019re in business for yourself and a cash-method taxpayer, you can postpone taxable income by waiting until late in the year to send out some client invoices. That way, you won\u2019t receive payment for them until early 2022. You can also defer taxable income by accelerating some deductible business expenditures into this year. Both moves will postpone taxable income from this year until next year when you optimistically believe it could be taxed at lower rates.\u00a0\u00a0<\/p>\n<h6><span class=\"ez-toc-section\" id=\"The_last_word\"><\/span><strong>The last word<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Nothing about federal income taxes is completely certain right now, including year-end tax planning advice. But I think what we say here and in my earlier column constitutes good stuff, based on what we know at this moment in time. Meanwhile, as I said at the beginning, stay tuned and stay flexible \u2014 right until the big ball comes down. You may have to make moves at the last minute.\u00a0\u00a0\u00a0<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Bill Bischoff\",\"subhead\":\"The Wall Street Journal\",\"list\":[,{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:contributors@marketwatch.com\",\"text\":\"contributors@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Bill_Bischoff\"><\/span>Bill Bischoff<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-7738-3E96FD56CF3B%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#Tax Guy: It\u2019s not too late \u2014 you can still trim your 2021 tax bill. Here\u2019s how.&#8221; The tax-smart ways to donate to charity, pre-pay college bills and deal with your Roth IRA. With year-end rapidly approaching, it\u2019s time to consider moves that will lower your 2021 tax bill and hopefully position you for tax&#8230;<\/p>\n","protected":false},"author":1,"featured_media":362286,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-428844\/horizontal","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-362285","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/362285","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=362285"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/362285\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/362286"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=362285"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=362285"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=362285"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}