As we reach the end of 2020 and we enter the holiday season we start to think about decorating, buying presents, and all the amazing food we are about to eat. But something else to consider and plan ahead for is your taxes. There are a few things that you can do to give yourself a strong start to 2021 and take advantage of all your tax breaks before the end of the year.

The first thing to look at is your charitable deductions. If you itemize your deductions then you can get a tax benefit for charity, but this year you can also get an above the line charitable deduction that was implemented with the CARES act. This means that you could get $300 in deductions for your charitable giving even if you do not itemize. If you plan on making a contribution to a charity then it may benefit you to do it during the 2020 tax year so that you can take advantage of this deduction.

Another Important thing to consider is the impact of the stimulus check on your taxes. If you received a stimulus check in 2020 then it may show up as a credit on your 2020 tax return. However this is something that you should discuss with your tax professional. Knowing how the stimulus check fits into your taxes for this year could impact your overall tax return.

Finally, make sure you are taking advantage of all the tax credits that are available at this time. Because of Covid-19 and the low interest rates that we have at this time, there is a major opportunity for those looking to take advantage of estate planning. Interest rates are at an all time low and estate and gift tax exemptions are at their peak right now. You can take advantage of this now before rules and exemptions have the opportunity to change.

The most important thing is for you to take advantage of all the tax benefits available to you in your situation. That is why it is important to discuss your taxes with a professional, especially with all the changes that we have seen during this year. Schedule a consultation before the end of the year so that you can plan for the upcoming year as well and make sure you are positioned for your best year yet.