Cut your 2021 tax bill with these last-minute actions

Read Time:2 Minute, 41 Second

Valery_G | iStock | Getty Images

Tax loss or gain

Filers may consider tax loss gains, which allows them to offset capital gains with losses. Investors who lose more assets than winners can even deduct up to $3,000 from their fixed income.

Ashton Lawrence, a CFP analyst at Goldfinch Wealth Management in Greenville, South Carolina, said: “If you are facing an unusually high income year or suffer huge losses, this may be a good strategy.”

If you are facing an unusually high income year or have suffered huge losses, this may be a good strategy.

Ashton Lawrence

Financial Advisor of Goldfinch Wealth Management

However, those who wish to sell and repurchase the same assets need to understand the so-called wash-sale rules, which prevent someone from deducting losses when repurchasing “essentially the same” investment within 30 days.

Investors below certain taxable entry thresholds can avoid levying capital gains taxes on profitable assets held for more than one year.

Then, they may repurchase the same investment on a so-called “tiered basis”, adjusting the purchase price to the current value to reduce future taxes.

Donate to charity

Charity investors can also consider year-end charity gifts, holding the most profitable assets for more than a year, such as stocks or cryptocurrencies, to provide the greatest tax relief.

The standard deduction for single filers in 2021 is US$12,550 (US$25,100 for couples filing together), so it is more difficult to itemize and apply for cancellation.

But many people combine years of donations (called “bundling”) to clear the standard deduction threshold.

However, for 2021, single filers can apply for tax deductions of up to $300 in cash gifts ($600 in joint filings), even if they do not itemize the deductions.

Retirees 70½ years and older can consider the so-called Qualified Charity Distribution, that is, payments made directly from a pre-tax personal retirement account that are not included in taxable income.

People 72 and older can use it to meet the minimum distribution they need each year.

Lawrence said: “If you want to donate to charities in a tax-efficient way, qualified charitable distribution is a valuable donation strategy.”

Pay for medical expenses

If you plan to itemize deductions in 2021 and spend a lot of money on medical expenses, it may make sense to pay off medical expenses before the end of the year to apply for a larger write-off.

In 2021, if the eligible expenses (such as doctor’s fees, consultation fees, prescription drugs, etc.) exceed 7.5% of the adjusted total income, the applicant can apply for a medical expense deduction.

“Qualified fees charged to credit cards on or before December 31, 2021 will be reported on your 2021 tax return,” Harris said.

Postpone revenue to 2022

Those expecting a decrease in income in 2022 may consider deferring income such as year-end bonuses or other payments to January.

“Please note that taxes in 2022 may be higher than in 2021,” said Patrick Amy, CFP and consultant at Overland Park Financial Advisory Services in Kansas. “But it will delay the payment of income tax for a whole year.”

If you want to know more about business please go to

0 %
0 %
0 %
0 %
0 %
0 %
We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners. View more
Cookies settings
Privacy & Cookie policy
Privacy & Cookies policy
Cookie name Active

Who we are

Suggested text: Our website address is:


Suggested text: When visitors leave comments on the site we collect the data shown in the comments form, and also the visitor’s IP address and browser user agent string to help spam detection. An anonymized string created from your email address (also called a hash) may be provided to the Gravatar service to see if you are using it. The Gravatar service privacy policy is available here: After approval of your comment, your profile picture is visible to the public in the context of your comment.


Suggested text: If you upload images to the website, you should avoid uploading images with embedded location data (EXIF GPS) included. Visitors to the website can download and extract any location data from images on the website.


Suggested text: If you leave a comment on our site you may opt-in to saving your name, email address and website in cookies. These are for your convenience so that you do not have to fill in your details again when you leave another comment. These cookies will last for one year. If you visit our login page, we will set a temporary cookie to determine if your browser accepts cookies. This cookie contains no personal data and is discarded when you close your browser. When you log in, we will also set up several cookies to save your login information and your screen display choices. Login cookies last for two days, and screen options cookies last for a year. If you select "Remember Me", your login will persist for two weeks. If you log out of your account, the login cookies will be removed. If you edit or publish an article, an additional cookie will be saved in your browser. This cookie includes no personal data and simply indicates the post ID of the article you just edited. It expires after 1 day.

Embedded content from other websites

Suggested text: Articles on this site may include embedded content (e.g. videos, images, articles, etc.). Embedded content from other websites behaves in the exact same way as if the visitor has visited the other website. These websites may collect data about you, use cookies, embed additional third-party tracking, and monitor your interaction with that embedded content, including tracking your interaction with the embedded content if you have an account and are logged in to that website.

Who we share your data with

Suggested text: If you request a password reset, your IP address will be included in the reset email.

How long we retain your data

Suggested text: If you leave a comment, the comment and its metadata are retained indefinitely. This is so we can recognize and approve any follow-up comments automatically instead of holding them in a moderation queue. For users that register on our website (if any), we also store the personal information they provide in their user profile. All users can see, edit, or delete their personal information at any time (except they cannot change their username). Website administrators can also see and edit that information.

What rights you have over your data

Suggested text: If you have an account on this site, or have left comments, you can request to receive an exported file of the personal data we hold about you, including any data you have provided to us. You can also request that we erase any personal data we hold about you. This does not include any data we are obliged to keep for administrative, legal, or security purposes.

Where we send your data

Suggested text: Visitor comments may be checked through an automated spam detection service.
Save settings
Cookies settings