The Child Tax Credit increases in 2021, and eligible taxpayers can receive an advance of this credit instead of waiting until they file their 2021 return in 2022.
All taxpayers with children age 17 and under qualify for $2,000 per child if their income is under $400,000 (MFJ) and under $200,000 (S). But taxpayers are eligible for an additional $1,000 or $1,600 per child if their MFJ income is below $150,000 or Single under $75,000. The advance is for up to 50% of the total credit and you don't have to sign up anywhere to receive it. Just file your 2020 return as soon as possible. The IRS is expected to set up a portal on their website by July 1st where taxpayers can add dependents born in 2021, make changes to their expected income, update their filing status, etc.
Budgeting....ugh! We know this is not a favorite topic, but they can be useful in helping to drive our behavior so we can get to where we want to go. Budgets are only as helpful as we stay disciplined to them. Budget forward, or in reverse, but don't forget to grow your revenues so that you can release some of your budgeting constraints. Budgeting is another way to help us live our priorities.
A Health Savings Account, or HSA, is more than what its name implies. It is a little-known retirement asset with big upside. It is the only Triple-Tax-Free investment vehicle that is a must-have if the following "rules" apply to you:
You have a high deductible health insurance plan, you pay for your OOP (out of pocket) health costs with your every-day cash, you or your employer fund your HSA account, and you save your OOP health care receipts.
That's it! Then let your investment grow (instead of the sub-optimal savings account bank rates) and you can reimburse yourself down-the-road for those OOP costs in 5 years or 20 years, tax free.
It's triple-tax-free because you'll get a tax deduction for funding your HSA account, the earnings will grow tax-free, and as long as you can support your reimbursed OOP amount, the principle returns to you tax free as well.
Money rules are just that: the rules of a game. And like all games, the rules can be manipulated, stretched, and creatively applied, depending on your unique situation, preferences, and priorities. What you learned about money from your parents can affect how you think about money today. Know Thyself is an often overlooked "rule" of money, and one that we have the most influence over.
There are a lot of reasons to make a decision, and the financial impact is just one of them. When someone tells you how you "should" manage/save/or spend money, watch out for their own incentives underlying that advice.
Introductory episode to the brand-new podcast that explores the underbelly of everything that's NOT talked about money. Tune-in for an intentional conversation about money, wealth, and the unspoken aspects of these concepts in our lives: what is it, who has it, and why it's important to focus on the Return On Your Life (ROYL), and not just the Return On Investment (ROI).