Reduce Your Tax Payable Or Increase Your Refund.

 Reduce Tax Payable Or Increase Refund

• Retirement Account : Max out contribution to your 401K, IRA , HSA account. These  contributions reduce your tax liability and increase refund. Although you can contribute to these accounts till 15th April, 2022. I would suggest planning it now, so that you can avoid last minute rush. Check for tax year 2021 limits

• Charitable Deduction: Now you can claim cash donation to certain charitable up to $600.00 (MFJ), or $300.00 (Single), even though you elect to  use standard deduction. If you are claiming a charitable contribution, you need to keep receipt of such a donation. 

• Loss Harvesting : Tax loss harvesting is when you sell some investments at a loss to offset gains you’ve realized by selling other stocks at a profit. The result is that you only pay taxes on your net profit, or the amount you’ve gained minus the amount you lost, thereby reducing your tax bill. Single filers and married couples filing jointly can deduct up to $3,000 in realized losses from ordinary income.

• Wash Sales: You can’t, for instance, sell a stock to realize a loss and minimize your tax burden—and then rebuy that exact same stock, or even one that’s nearly identical. This maneuver is referred to as a wash sale. A wash sale occurs when you sell securities at a loss and within 30 days before or after the sale buy “substantially” identical securities, or acquire a contract or option to do so. The wash sale rule does not, however, preclude purchasing securities in the same industry. For example, you can sell shares of Pfizer and replace them with shares of Merck. 

• Flexible Spending Account: FSA : Use IT or Lose IT. A Flexible Spending Account (also known as a flexible spending arrangement) is a special account you put money into that you use to pay for certain out-of-pocket health care costs. FSAs are limited to $2,750 per year per employer. If you’re married, your spouse can put up to $2,750 in an FSA with their employer. You generally must use the money in an FSA within the plan year. But your employer may offer one of 2 options:(1) It can provide a "grace period" of up to 2 ½ extra months to use the money in your FSA.(2) It can allow you to carry over up to $550 per year to use in the following year. As per [ https://www.irs.gov/pub/irs-drop/n-21-15.pdf], this rule temporarily  is allowing carry entire unused amount to next year

• Defer your income: By deferring ( postponing ) income to  next year, you may be able to minimize your current income tax liability.