Severn, MD: Tax Credit, Income & Extension Limits Increasing in 2021

By
Services for Real Estate Pros with Lisa D Church CPA, EA, MBA, NTPI Fellow

As a result of annual IRS cost-of-living adjustments, a number of federal tax credit amounts and income limits will increase in 2021. Here are some of the most significant changes affecting taxpayers at a variety of income levels.

 

EARNED INCOME CREDIT (EIC) CHANGES. The maximum credit amounts for taxpayers with zero, one, two, or three or more children will all increase. For example, the maximum credit for a family with three or more children will be $6,728, up from $6,600 in 2020. The income limit to receive the maximum credit, along with the maximum income at which a taxpayer may receive an EIC in any amount, will also rise from 2020 levels.

 

HIGHER EXCLUSION FOR ESTATE TRANSFERS. The lifetime exclusion for estate transfers and bequeathals will be $11,700,000 in 2021, up from $11,580,000 in 2020. However, the annual gift and transfer exclusion limit will remain at $15,000.

 

INCREASED INCOME LIMIT FOR THE LIFETIME LEARNING CREDIT. For couples filing jointly who claim the Lifetime Learning Credit, the gross income level used to calculate a reduction in the credit will rise from $118,000 to $119,000.

 

LARGER ADOPTION CREDIT. The maximum credit for adoption expenses will increase by $140 for 2021, up to $14,440.

 

HIGHER FOREIGN INCOME EXCLUSION. The foreign earned income exclusion amount will be $108,700 in 2021, a $1,100 increase over the 2020 level of $107,600.

A tax professional can help you determine whether these and other IRS adjustments could affect your 2021 taxes. If a significant change in your annual tax bill might occur, you may need to adjust your paycheck withholding amount and/or quarterly estimated tax payments.

.

.

 

My practice is in Severn, MD.

I specialize in the following services for both businesses and individuals:

Tax Services:

Tax Preparation & Tax Planning

Virtual Tax Preparation

Audit Protection

IRS Tax Problem Resolution

 

Accounting & Bookkeeping Services:

Outsourced Accounting and Bookkeeping

Payroll Services

Business Consulting

Outsourced CFO Services

QuickBooks Set up and Support Services

 

Who we serve:

We have special expertise in serving the following industries:

Small Business Owners

Real Estate Investors

Medical Practices

Attorneys & Law Firms

Individuals

 

Contact me for any help needed at:

Lisa D Church, CPA, EA, NTPI Fellow, MBA

7865 Clark Station Rd

Severn, MD 21144

email: lisa@waterfronttax.com

website: https://waterfronttax.com

call 877-727-6577 to talk to office support 24/7 to schedule appointments

Or Schedule a free consultation directly on my calendar at https://waterfronttax.setmore.com/

 

Comments (1)

June Piper-Brandon
Houwzer Inc - Baltimore, MD
Piecing Dreams One Home at a Time

This is very useful information for anyone filing taxes in Maryland.

Jan 31, 2021 08:15 PM