Nicholas Liou recently discussed the tax law changes that will take place for the 2021 tax year.
– Nicolas Liou
EVANSTON, Illinois, United States, November 22, 2021 /EINPresswire.com/ – Tax changes often happen without the public knowing. This is because many people turn to tax professionals or software to help them complete their tax returns. Tax expert Nicolas Liou recently explained some upcoming tax law changes that may have passed under your radar.
âChanges in tax laws are happening all the time,â Liou said. “Those outside the financial industry probably don’t even notice it. However, these laws can have a major effect on your tax payments or refunds.”
Nicholas Liou explained that it’s important to understand which changes in tax law will affect you, especially if you do your own taxes. This can greatly affect the amount you have to pay or receive from the government.
Liou first explained the Consolidated Appropriations Act, 2021. This includes many tax provisions on how Americans pay their taxes for at least the next year. This law grants a tax credit of $ 600 to each taxpayer as well as an extension allowing business owners to deduct 100 percent of certain meal expenses.
Further adjustments for inflation were made in 2021. Unexpected financial strains over the past two years have caused income tax rates to rise faster than income. Many taxpayers will see the amount of the standard deduction increase to $ 18,800.
âWe can expect to see larger exemptions during the 2021 tax season,â said Nicholas Liou. âA lot of the changes we are seeing are due to the COVID-19 pandemic and the extreme financial stress it has placed on many individuals and businesses. “
The alternative minimum tax was designed to prevent wealthy individuals and families from using too many tax deductions or credits. The goal is to close some loopholes that rich taxpayers have been using for years. In the past, middle-income taxpayers were forced to pay the AMT because it did not automatically adjust for inflation. The tax now adjusts automatically, providing relief to the middle class.
âIt is important to note that some benefits of the CARES Act were phased out in 2020 and have now expired,â Liou said. âThese include the suspension of student loan payments and the ban on evictions in some cities and states. It is important to know which provisions have been extended and which have expired when filling out your taxes for 2021. â
Nicholas Liou suggested one of the the best way to prepare for such tax changes is to speak with your tax accountant. He or she may be able to help you contribute to some savings or retirement accounts that can help you save tax this year.
The past few years have been unpredictable and saving as much as possible on your taxes can mean a less stressful year 2022.
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