- Medicare Part B: Be careful about making a large conversion if you're within two years of signing up for Medicare — you'll have to pay extra for Medicare Part B if your adjusted gross income (plus tax-exempt interest income) is more than a certain amount. Your last tax return on file determines your Medicare premiums.
- Review your medical bills: If you have enough unreimbursed medical expenses, you may be able to deduct them. You can only deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income. That puts this tax break out of reach for most taxpayers, but if you had extraordinarily high medical expenses this year — due to a major illness, for example — you may qualify. There's still time to schedule appointments and procedures that will increase the amount of your deductible expenses. The list of eligible expenses includes dental and vision care, which may not be covered by your insurance. For the complete rundown, go to IRS Publication 502.
- Contribute to a 529 college savings plan: Stashing money in a 529 plan before year-end won't reduce your federal tax bill, but it could lower your state tax tab. More than 30 states allow you to deduct at least a portion of 529 plan contributions from state income taxes. In most states, you must contribute to your own state's plan to get the tax deduction, but several states allow you to deduct contributions to any state's plan. Check out your own state's rules at savingforcollege.com. Many states allow grandparents and others to contribute to your child's plan, and a few will allow them to deduct those contributions.
- Save for Retirement 401k & Roth 401K: As the year comes to a close, you may be able to squeeze a little more money from each paycheck for your retirement savings. You can contribute up to $19,500 to a 401(k), 403(b) or federal Thrift Savings Plan in 2021, plus $6,500 in catch-up contributions if you're 50 or older. Pretax contributions will lower your take-home pay and reduce your tax bill. If your employer offers a Roth 401(k), you can make contributions that won't lower your taxable income now but that can be withdrawn tax-free in retirement. If your employer offers both types of plans, you can direct new contributions to the Roth 401(k) rather than the pretax 401(k) at any time. Contact your 401(k) administrator or your employer's human resources department ASAP to find out how much you're on track to contribute to your 401(k) by the end of the year.
- Short-term Capital Gains: The tax rate on short-term capital gains (i.e., from the sale of assets held for less than one year) is the same as the rate you pay on wages and other "ordinary" income. Those rates currently range from 0% to 15% to 20%, depending on your taxable income.
- ABLE Account: Look into an ABLE account. If someone in your family has special needs, you can contribute up to $15,000 this year to an ABLE account, which allows people with qualifying disabilities to save money without jeopardizing government benefits (ABLE account beneficiaries can contribute more to their own account). You don't have to invest in your own state's plan, but if you're a resident of one of the states that do offer a tax break for ABLE accounts, you can deduct your contribution. For more information, go to the ABLE National Resource Center's website.
Due Dates for Estimated Tax Payments
Payment |
Payment Due for Period of |
Due Dates |
1st Payment |
January 1-March 31 |
April 15 |
2nd Payment |
April 1-June 30 |
June 15 |
3rd Payment |
July 1-September 30 |
September 15 |
4th Payment |
October 1-December 31 |
January 15 |
Helpful websites:
Where’s my refund: https://www.irs.gov/refunds You Will Need: Social security number or ITIN; Your filing status; Your exact refund amount
IRS Taxpayer Estimated Payments EFTPS: https://www.eftps.gov/eftps/ The Electronic Federal Tax Payment System® tax payment service is provided free by the U.S. Department of the Treasury. After you've enrolled and received your credentials, you can pay any tax due to the Internal Revenue Service (IRS) using this system.
Connecticut Check the status of your refund: https://drs.ct.gov/eservices
Social Security Administration:
https://www.ssa.gov/myaccount/index2.html
Where’s my refund: https://www.irs.gov/refunds You Will Need: Social security number or ITIN; Your filing status; Your exact refund amount
IRS Taxpayer Estimated Payments EFTPS: https://www.eftps.gov/eftps/ The Electronic Federal Tax Payment System® tax payment service is provided free by the U.S. Department of the Treasury. After you've enrolled and received your credentials, you can pay any tax due to the Internal Revenue Service (IRS) using this system.
Connecticut Check the status of your refund: https://drs.ct.gov/eservices
Social Security Administration:
https://www.ssa.gov/myaccount/index2.html