ACP members supply tricks to taxpayers on the right way to get probably the most out of their earnings in 2021

As the tax season advances, tax-conscious financial planners weigh in

WILMINGTON, N.C., March 25, 2021 / PRNewswire / – With the new tax deadline of 17th of May threatening much of America (and 15th June For states hit by the February storm, seven certified members of the Alliance of Comprehensive Planners (ACP) have provided a range of tax tips to help the public and those still in the middle or nearing preparation for their 2020 year: to help tax refunds. ACP members are a community of tax-focused financial planners who provide their clients with comprehensive planning strategies on a commission basis. They adhere to fiduciary standards, which means they are legally and ethically obliged to put the well-being of their customers first.

Even if you've prepared your own tax return in the past, recent changes to the tax law have been so extensive, both in terms of the number of changes and the size of the number of taxpayers involved, that using a qualified tax advisor is now even more valuable around make sure that you prepare your return correctly and that you do not overlook anything. Understanding the complexities of accurately reporting income and losses from investing or living and working in multiple states may require the help of a qualified tax advisor; B. a registered agent or a CPA. "

Tricia Rosen, CFP® & Principal

Access Financial Planning, LLC

Journalists wishing to interview one or more of these professionals are invited to contact [email protected]. Consumers seeking professional tax strategy, financial planning and investment management, as well as financial advisors interested in learning more about joining the organization, are invited to visit


According to Tricia Rosen, CFP®, MBA, EA, Principal of Access Financial Planning, LLC in Andover, MASome tax preparation reminders for 2021 that can be overlooked include:

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  1. For those who claim the standard deduction in lieu of the listing, the above-the-line charitable deduction has been increased to 2021 for 2021 600 dollars for a married couple who register a married couple together, while the deduction was for the 2020 tax year 300 dollars per tax return regardless of the registration status. Contribution must be made in cash and to an IRS recognized non-profit organization.

  2. For those listing their deductions, the adjusted gross income limit for cash contributions to qualified nonprofits remains suspended for 2021, which means that cash taxpayers can deduct up to 100% of their Adjusted Gross Income (AGI) in 2021.

  3. The penalty for overrating a charitable deduction has been increased from 20% to 50% of the underpayment. So don't try to misrepresent the numbers to take advantage of the bigger prints. Keep a receipt for a charitable donation $ 250.

  4. The IRS works on a pay-as-you-go basis. This means that you will have to pay tax on the income that is earned throughout the year. Otherwise, penalties may apply. Though the federal income tax deadline has been postponed May 17, 2021 and many states have also postponed their deadline for filing income taxes May 17, 2021Note that the date for paying quarterly estimated taxes has not changed April 15, 2021. A recent amendment to the tax law makes the first $ 10,200 of tax-free unemployment income for taxpayers with a modified adjusted gross income of less than $ 150,000However, states differ in how they deal with unemployment income. If you filed your tax return before the new unemployment income exclusion went into effect, the IRS advises taxpayers not to file an amended tax return. Instead, the IRS recalculates the tax due and reimburses the taxpayer for any overpayment without the taxpayer taking any action. Stimulus packages are considered a tax credit rather than income, so they are not subject to income tax.


Working with a professional tax advisor may be more important today than it was before the pandemic as more people will have complex tax return situations. The growth of individual investors who participate in stock trading and do not understand the tax implications of trading can come as a surprise to many. Many people who have worked remotely during the pandemic in a state other than their normal state may be required to file tax returns in more than one state, and states may have different regulations than the IRS, causing confusion regarding Taxes may result in preparing the return.

The accessibility and popularity of trading apps like Robinhood has enabled many inexperienced investors to participate in the exchange. While better access to one of the few meaningful ways to increase wealth is a positive aspect of trading apps, many newer investors, due to a lack of education and guidance on how to trade, lead to mistakes that have dire consequences. For example, new investors may not be aware of the laundry sale rules that prohibit the sale of a loss-making investment and replace it with the same or a substantially identical investment 30 days before or 30 days after the sale. If a wash sale occurs, the IRS does not allow the investor to write off the investment loss. As a result, inexperienced investors can realize a much larger taxable capital gain from stock deals than expected by frequently trading the same or similar stocks.

"We often hear people say their tax returns aren't complicated, so just do it personally," she said Linda Y. Leitz, Ph.D., CFP®, EA, Founder and President of Peace of Mind Financial Planning, Inc. in Colorado Springs, CO. "But taxes change every year, and it is probably not advisable to assume that your situation does not require professional input. You may be missing deductions or making improper deductions that could result in fines if audited."

"Even if you've prepared your own tax return in the past, the recent changes to the tax law, both in terms of the number of changes and the size of the number of taxpayers involved, have been so extensive that using a qualified tax advisor is even more valuable now." to make sure you prepare your return correctly and don't miss anything, "added Rosen. "Understanding the complexities of accurately reporting income and losses from investing or living and working in multiple states may require the help of a qualified tax advisor such as a registered agent or CPA."

TIP 2: UNDERSTAND STIMULUS Aptitude Assessment

"This year the stimulus checks result in a small wrinkle," added Leitz. "If you submitted a return for 2019 that shows you qualified, you received a check. If you don't need to submit a return for 2020, you may still want to. That return includes what stimulus checks you do received – or not. " t received – and confirmed it with the IRS. And if you've been eligible to stimulate money but haven't received it, that lets the government know to send you your share. "

"Sometimes people are in a hurry to file their taxes for a much-anticipated refund, but that can backfire with the stimulus plan," added Rorik Larson, MBA, EA, CFP® of Essential Financial Strategies. Palos Heights, IL. "Eligibility for stimulus payment is based on the most recently filed tax return. Taxpayers can help themselves by reviewing the stimulus payment rules to see if their 2019 and / or 2020 tax return means they are eligible for the tax return $ 1400 Stimulus payment. Full payment is received for individuals with an income below the entitlement amount and a proportionately reduced amount up to the exit amount. "

According to Larson, the limits are $ 75,000 Gross income ($ 80,000 expire) if single, $ 112,500 (($ 120,000 expire) when submitting as head of household or $ 150,000 (($ 160,000 expire) if submitted married together. "If 2019 income is too high but 2020 income qualifies, the 2020 return needs to be filed quickly," said Larson. "If 2019 income does qualify but 2020 does not, it makes sense to defer filing until payment is received so as not to create an improper situation. This deliberate delay strategy could include filing an extension when payments are made until then will be delayed April 15th. "


Let your advisor make tax projections so you can make estimated tax payments and avoid penalties Carol Friedhoff, CFP®, EA, MS, PMP, from Savvy Outcomes in Tucson, AZ. The process is easy, she said.

"The individual collects all sources of income, deductions that he can make and what taxes have been paid so far," Friedhoff explained. "Use tax software to project if there is more tax to be paid. If so, the person would make an estimated tax payment."


"Roth IRAs can be a key element in planning financial success in your life, and careful management can add to their value," he said Jared Hoole, CFP®, Founder and President of Lakeside Financial Planning in Windham, NH.

"One tax planning strategy we are beginning to implement is Roth converts for professional clients that are in the 12% tax bracket," he said. "Traditionally, we have recommended that customers who are still in the workforce and are under Roth exit restrictions contribute directly to their Roth IRA accounts. In the past, most of our Roth conversion recommendations were reserved for retired customers in low tax brackets."

In addition to the direct Roth contributions, Hoole now also recommends working customers who are in the tax bracket of 12% to carry out a Roth IRA conversion. The conversion amount corresponds to the additional income required to refill the bucket.

"For example, if a married taxpayer had taxable income of $ 60,250 in 2020 we would recommend the conversion $ 20,000 there is the tip of the 12% bracket $ 80,250 for 2020, "he explained." Given that current tax rates are historically low and likely to rise in the future to offset Congress's COVID-19 aid spending, we believe that now, more than ever, is a critical time to move money to tax-free Roth- Accounts. "The deadline for Roth conversions is the end of the year. While it may be too late to implement this strategy for 2020, it is a good time to start thinking about conversions for 2021.


For nonprofits over 70 ½ years old with IRA assets, consider Qualifying Not for Profit Distributions (QCDs). This is one of the few ways that tax laws allow people to take money from their traditional IRA without paying income tax, explains Kenneth F. Robinson, JD, CFP®, Founder and President of Practical Financial Planning in Rocky River, OH.

"In addition to being tax-free, each QCD counts toward each RMD Required Annual Distribution, which saves federal (and sometimes state) income tax," he said. "It also reduces the number of future RMDs. QCDs save hundreds or thousands in tax bill and are clearly better for many taxpayers than taking the money out of the IRA and then writing a check to the charity."

With instructions from the taxpayer, the financial institution holding the IRA can send these donations directly to the charities or make distributions to the charity, but these are delivered to the taxpayer. Both have the same bottom line: the taxpayer saves taxes by lowering taxable income.

"If you can tell your tax advisor how much of your distributions were QCDs for the year, these charitable gifts will be excluded from your income," Leitz said. "This is especially useful when you don't have enough prints to break them down."

Tax savings can also be made for nonprofit taxpayers eligible for listing to transfer stocks or other high-yielding investments to their preferred charity rather than writing a check every year.

"The taxpayer benefits from the charitable deduction of the market value of the transferred investment and avoids paying capital gains taxes on the investment. This is especially true if they sold the investment first and then gave the charity the money from the proceeds of the sale." added Larson.


For many, retirement is a new exciting time, full of adventure and the opportunity to choose how they want to live life. However, it can be easy to overlook taxes as you transition into retirement. A common problem for new retirees is not withholding their taxable pensions, 401 (k) s, or traditional IRAs once they leave the workforce. While at work, employers are required to withhold tax money for income and other taxes. The withholding of retirement distributions is at the discretion of the retiree.

"Our income tax structure is a pay-as-you-go system," said Larson. "This means that state and federal agencies expect to collect their share of taxes by the time taxpayers receive taxable income. Therefore, at tax time, penalties for late payments are possible in addition to a substantial tax burden. A tax-conscious financial planners like members of the Alliance of Comprehensive Planners can help people avoid this situation by calculating required withholding taxes or quarterly estimated payments. "


The nuance of taxing equity adjustment payments can be intimidating to some, but tax-focused financial planners can help, he said Jane Yoo, CFP®, the CEO of Jane Financial, a comprehensive financial planning firm serving women in the technical field Oakland, CA.

For example, if the taxpayer's employer recently went public, the impact of the IPO on an individual's taxes will depend on whether they have restricted stock units (RSUs) or stock options.

"When your RSUs are vested, most employers keep some stock to cover income and payroll taxes," Yoo said. “This will cover most, but not all, of your tax bill. Work with a financial advisor or tax professional to find out how much you will owe next April 15thand whether estimated taxes are payable. "

Stock options are more complicated. When an employee exercises their options, the difference between the share price at the time they were exercised and their exercise price is taxable profit.

"If you sell the resulting stock, any growth since the exercise date is also taxable. Incentive stock options (ISOs) are particularly complex because of the alternative minimum tax (AMT)," said Yoo. "At the very least, check with a tax advisor or a member of the Alliance of Comprehensive Planners before exercising stock options."


The Alliance of Comprehensive Planners (ACP) is a community of tax-conscious financial planners who offer their clients comprehensive planning strategies based on fees. ACP members must retain the CFP® or CPA / PFS designation and complete the rigorous ACP training program. To learn more about this trust network or to find a certified ACP member, visit

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ACP members provide tips to taxpayers on how to get the most of their returns in 2021
As the tax season advances, tax-conscious financial planners weigh in


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SOURCE Alliance of Comprehensive Planners (ACP)