Here are three time-tested steps you can take to begin your 2021 tax planning on the right foot: Check your withholdings. Confirm you have the right amount withheld from your paycheck in 2021. Doing this will help you make sure your withholdings will meet minimum tax payment requirements, so you don’t end up paying underpayment penalties or providing interest-free loans to the IRS. It’s imperative to check if you recently had a change in income or you’ve experienced a significant life event, like childbirth or a new home purchase. You can check your withholding using the IRS Withholding Tool. If you need to change your withholding, complete a new Form W-4 and submit it to your employer as soon as you can. Prioritize retirement and savings plans. This is low-hanging fruit when it comes to tax savings. Look over your 401(k), individual retirement account (IRA), health savings account (HSA), and other savings accounts to ensure you’re maximizing your tax savings. Establish a regular contribution schedule early in the year, while taking into account the maximum contribution limits (401(k) is $19,500; age 50 years and over can contribute $26,000; IRA is $6,000; age 50 years and over can contribute $7,000). And if you’re working, make sure to take full advantage of your employer’s retirement matching program - it's free money to you. Find out more about creating an effective tax strategy using these tips and others when you call to set up a tax strategy planning appointment.

As always, should you have any questions or concerns regarding your tax situation, please feel free to call. Philip L. Liberatore, CPA remains committed to providing you with important information that pertains to your success. Learn more here: https://www.liberatorecpa.com/