A funny thing happened as I was completing my 2021 tax preparation. TurboTax informed me that, for the first time in my adult life, my AGI was too high to qualify for an tax-deductible IRA contribution.
In part, this was largely because I actually worked a full year for the first time in the last 4 years, and in part because my CMF work for TMF increased in the last year, and there is no withholding there.
I was still able to itemize deductions, given my self-employment tax (as a freelancer for TMF), a small SEP IRA contribution (from my income as a freelancer for TMF), and generous (for me) charitable giving. but I also had about $1000 less in withholding (no Census work last year, which also meant no deductions for the business use of the FuskieMobile™).
Also, even through I am paying full price for my healthcare premiums through my full time employer and high deductible, I do not believe those premiums are tax deductible because they were paid with pre-tax dollars, and the prescriptions and doctors visits were paid out of an HSA account (whose contributions as well as Roth 401k contributions were already deducted in my W2).
What this means is that for the first time in a very long time, I owe federal taxes. Not just a little, but a sizeable chunk. Nothing I cannot handle, but still, a bit of a sticker shock. On the other hand, I get a refund on my state tax, which will offset about 8% of the federal tax due.
It also means I won’t be able to save my refund to pay for my property taxes next fall.
My question to you is, given that I worked full time from home (W2, no home office deduction), and given that I worked freelance for TMF (took a small home office deduction for the space where the computer I use for work is located, but not the whole office space because I use it for personal work as well), what might I be missing that could lower my federal obligation?
I plan on going through it one more time tomorrow, and am pretty sure I didn’t overlook anything, but I’m open to ideas.
Who also has to file a Form 990-N this weekend (and a California equivalent) for a professional association that he became the board chair of this year…
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