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An overview of the 2021 tax year and how you can
best be prepared.
Overview

Q My favorite

Section Vehicle Deductions

Questions?
179 B Deductions X

Tracking
I Deductions
 Overview of the IRS this year

Current Backlog of returns 24 million!

Increase in the US population by 60% but a decrease in IRS budget by 20% (same
number of employees as in 1970)

IRS Tried to hire 5000 new staff members but only 250 applied

Only 11% of calls to the IRS were answered last year (32 million/282 million)
 Two important definitions

Deductions Credits

Reduce your taxable income.

Directly reduce your tax bill or
Increase your refund
Example: Deduction

I make $20000 & my tax rate for having $20000 or more is 10 %

$20,000 x 0.1= $2000 (this is how much I owe in taxes)

Having less than $20000 puts me in the 8% tax bracket

I receive a deduction of $2000, lowering my taxable income from $2000 to

$18,000

$18,000 x 0.08 = $1,440

Instead of paying $2000 in taxes I only pay 1,440 in taxes, saving me $560!
Example: Credits

I make $20000 & my tax rate for having $20000 or more is 10 %

$20,000 x 0.1= $2000 (this is how much I owe in taxes)

I receive a credit of $2500.

Instead of me owing $2000, I now have a refund of $500.

2500 (Credit) - 2000 (tax liability) = $500 refund.

1099-B Basics Reporting Profits
If you made over $12,950 in total income you are required to file!

Reporting Losses
You can up to $3000 in losses for the current taxable year, anything
in excess of that can be carried over to the following taxable years

Wash Sale Rules

The rule defines a wash sale as one that occurs when an individual
sells or trades a security at a loss and, within 30 days before or
after this sale, buys a "substantially identical" stock or security, or
acquires a contract or option to do so.
Understanding 1099-Bs (Proceeds vs Cost Basis)
Wash Sale Dangers
Questions?
Contact information

1-347-995-7771

brian.polanco@vtaxsolutions.com
PRC Pricing

Individual returns Married returns Self employed/

Business returns

$300 $400 $500

$225 $325 $425
QR code for consultations