Tax Facts

The special Child Tax Credit is still available.

Unfortunately CA State income taxes are still the highest in America.

For the year of 2020 SOCIAL SECURITY TAX will be deducted from your paycheck all the way up to $137,700. For 2021, the limit will go up to $142,800from your paycheck.

Save for the future with a Roth IRA contribution. These are not deductible now, but are Tax Free for life. Special rules also pertaining to IRAs pertain to the Roth IRA.

You can contribute $6,000 to a Roth or Traditional IRA and for age 50 and over you can contribute up to $7,000. High income earners do not qualify.

For self-employed individuals the maximum contribution to your SEP-IRA is $57,000.

401(k) Plan Contributions to your plan at work will now allow up to $19,500 per year. For those aged 50 and older you can make an additional catch-up contribution of $6,500.

The automobile business mileage expense deduction
For 2020 it is 57.5 cents per mile.  In 2021 it is 56 cents for self-employed only (not for employees)

Up to $2,500 of interest on qualified Student Loans can be deducted. The deduction phases out on joint returns between $140,000 and $170,000 & on single returns between $70,000 and $85,000.

College education credits: These credits can be taken if your income is below $160,000 if married and $80,000 for single filers.

Renter's credit for state tax is again available. $60 for single taxpayers that are under $43,533 income. $120 for joint filers less than $87,066.

Annual Gift Tax Limit: you can give up to $15,000 per person (This is not a tax deduction but saves on your estate tax when you die).