Tax law changes and proposals complicate 2021 planning

CHICAGO (Oct. 19, 2021) – There is a lot of uncertainty when it comes to 2021 tax planning on account of the shift in political control in Washington, the ongoing COVID-19 pandemic and evolving U.S. economic situation. To help navigate tax law changes and key tax provisions, Crowe LLP, a public accounting, consulting and technology firm in the U.S. with offices around the world, has issued “Tax Planning: 2021 Year-End Guide.”

The guide provides an overview of key tax law provisions in recent legislation, such as the Consolidated Appropriations Act (CAA) and the American Rescue Plan Act (ARPA). According to Nicole Bencik, managing partner of tax at Crowe, on top of tax law changes that have already gone into effect, more major tax changes could be on the horizon.

“The past year and a half have been transformational, changing the way we live, the way we work and the way we do business. The only certainty is that more change is on the way,” Bencik said. “Thriving in this environment means understanding the current rules, keeping abreast of potential changes and preparing for what might come.”

The guide includes deeper insights on the following topics:

• Income and deductions: Timing income and expenses, effects of the Tax Cuts and Jobs Act (TCJA) on timing, tax-advantaged savings for health care, smaller alternative minimum tax (AMT) threat, avoiding or reducing AMT, payroll taxes, self-employment taxes, the additional 0.9% Medicare tax, owner-employees and estimated tax payments and withholding
• Executive compensation: Restricted stock, restrictive stock units (RSUs), incentive stock options (ISOs), nonqualified stock options (NQSOs) and nonqualified deferred compensation (NQDC) plans
• Investing: Capital gains taxes and timing, being tax-smart with losses, the wash-sale rule, mutual funds, small business stock, passive activities, income investments, 3.8% net investment income tax (NIIT) and investment interest expense
• Real estate: Home-related deductions, home rental rules, home sales, real estate activity rules, depreciation-related breaks and tax-deferral
• Business ownership: Business structure, 199A deduction for pass-through businesses, retirement saving, exit planning and sale or acquisition
• Charitable giving: Cash donations, stock donations, IRA donations, making gifts over time, charitable remainder trusts, charitable lead trusts and qualified charities
• Family and education: Child and dependent care breaks, the “kiddie tax”, IRAs for teens, 529 plans, prepaid tuition vs. savings plan, Coverdell education savings accounts (ESAs), Achieving a Better Life Experience (ABLE) accounts and education tax credits
• Retirement: Retirement plan contributions, Roth IRA conversions, early withdrawals, leaving a job and required minimum distributions (RMDs)
• Estate planning: Estate tax, gift tax, generation-skipping transfer (GST) tax, state taxes, exemption portability, tax-smart giving and trusts
• Tax rates: Income tax rates for individuals, corporations and estates and trusts

To download the guide, please visit Tax Planning: 2021 Year-End Guide.

About Crowe

Crowe LLP is a public accounting, consulting and technology firm with offices around the world. Crowe uses its deep industry expertise to provide audit services to public and private entities. The firm and its subsidiaries also help clients make smart decisions that lead to lasting value with its tax, advisory and consulting services. Crowe is recognized by many organizations as one of the best places to work in the U.S. As an independent member of Crowe Global, one of the largest global accounting networks in the world, Crowe serves clients worldwide. The network consists of more than 200 independent accounting and advisory services firms in more than 130 countries around the world.