Tax Experts Available now

  Here are the itemized deductions limits on the Schedule A:

• Medical  and Dental Expense Deductions– Only expenses exceeding 10% of your AGI.
• State  and Local Taxes Deductions - combined total  of $10,000 ($5,000 for married filing separately.)
• Home   Mortgage Interest Deductions - up to $750,000 ($375,000  for married filing separately.)
• Charitable  Cash Donations Deductions – Limited to 60% of AGI
• Casualty  and Theft Losses. Limited to losses attributable in  a declared federal disaster area.

Most deductions are available only if you itemized, however here are some deductions that are still available if you take the standard deduction (Above-The-Line Deduction):

• Student      Loan Interest Deduction - $2,500 (begins phasing out at $70,000-MAGI and not  available to tax payers $85,000+)
• Educator      Expense Deduction - $250 paid or incurred  for books, supplies and supplementary materials used in the classroom (Kindergarten - High school teachers only).
• Charitable  Contributions Deduction -   up to $300 for cash contributions ($600 if married filing jointly). 

  These are some additional tax credits and deductions for 2021 tax year:

• Child  Tax Credit - $2,000 per qualifying child (up to $1,400 is refundable)
• Earned  Income Tax Credit (EITC) - 1 qualifying child - $3,618, 2 qualifying children - $5,980 and 3 or  more qualifying children - $6,728. Individuals with no qualifying  children credit is $1,502.
• Adoption Credit - up to $14,440 
• Lifetime Learning Credit – up to $2,000 per tax return 
• Medical Savings Accounts (MSA) - maximum out-of-pocket expense amount is $4,800 (high-deductible health plan - HDHP)

Foreign Earned Income Exclusion. 

The foreign earned income exclusion amount for the 2021 tax year is $108,700.

Section 199A deduction/Pass-through Deduction

Sole proprietors and owners of pass-through businesses are eligible for a deduction of up to 20% to bring the tax rate lower for Qualified Business Income (QBI). This deduction is subject to threshold and phase-in amounts. 

Federal Estate Tax Exemption

An Estate Tax is levied by the government on estates when a person dies, and assets are passed on to heirs. Generally, if the value of the decedent’s estate is less than $11.7 Million in 2021, the estate is NOT subject to estate tax (Estate Tax Exempt). The estate tax exempted amount is adjusted each year for inflation and only affects a small percentage of Americans. 

Gift Tax Exclusion & Gifts to Foreign Spouse

The annual exclusion for federal gift tax purposes for 2021 is $15,000 per person.  The exclusion amount for gifts to a spouse who is not a United States citizen is $159,000.

Revocation or Denial of Passport Due to Significant Tax Debt

Yes, under the Fixing America’s Surface Transportation Act (FAST), the IRA can notify the state department of a taxpayer’s serious tax delinquency – for 2021 $52,000 or more. The state department is then required to deny or revoke the taxpayer’s passport.