In this guide, we will explore where your tax dollars go and some of the ways tax filing may look different in 2021 as well as what you can do to prepare. It also accounts for changes in the tax code due to the CARES Act and other COVID-19 legislation.
Before we dive into the upcoming tax brackets and what you can do to prepare for 2021, it can be helpful to understand precisely where the government allocates your federal tax dollars.
In 2019, the federal government spent $4.4 trillion, which equals 21% of the nation’s gross domestic product (GDP). Further examination reveals that three significant areas of spending make up the majority of the budget:
- Medicare, Medicaid Marketplace Subsidies and CHIP
- Defense Spending
- Social Security
We hope you found this report to be educational and informative. You may incorporate the principles and tips in this report into your tax preparation strategy.
Planning well in advance may enable you to take advantage of the opportunities and benefits available under the new tax code.
Keep in mind, this guide is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before modifying your strategy.